- 32 - In the course of discussions, one idea that was raised, but quickly dismissed, was to have a law passed entitling EGPC to a credit for taxes paid directly by Amoco Egypt. Amoco left the first negotiating session having agreed to look into the U.S. tax consequences of allowing EGPC a tax credit for Egyptian taxes paid directly by Amoco Egypt, by inserting language to such effect into the MCA. Amoco also considered amending the language of Article IV(f)(6). Following the September 1980 meetings in the ARE, Amoco officials met with Nordberg, who reiterated to Amoco that Article IV(f)(6) should be deleted from the agreement and, moreover, advised that a continuation of EGPC's credit practice could jeopardize U.S. tax creditability. Nordberg advised that allowing EGPC a tax credit would severely jeopardize a favorable ruling from the IRS. The advice was based on Nordberg's analysis of Rev. Rul. 78-258, 1978-1 C.B. 239, and the proposed regulations under section 901, under which, he thought, allowing EGPC a credit would constitute an indirect subsidy. Amoco accepted Nordberg's advice. Nordberg advised that it would not jeopardize U.S. creditability if EGPC got relief in a manner not related to the amount of Amoco Egypt's tax payments, including if EGPC were forgiven a fixed fraction of its taxes, or EGPC's royalty obligation were eliminated.Page: Previous 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Next
Last modified: May 25, 2011