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if any, between the taxes it paid and any additional revenue it
received under the PPIA provisions. In an attachment to the
letter, Amoco Egypt described the status of the negotiations in
part as follows:
At one point EGPC questioned the deletion of the
following provision in the Concession Agreements
[Article IV(f)(6)] * * * The loss of such credit or
more precisely "deductions" said EGPC, is apt to
adversely affect its financial position. Clearly the
loss of this credit will have no impact whatsoever on
Egypt as a whole. As to EGPC, it is possible to offset
the loss of above credit by EGPC agreeing with the
Government to reduce the royalty paid [by EGPC] to the
Government. [Emphasis added.]
By letter dated March 20, 1981, Amoco submitted additional
information to the IRS regarding its January 1981 ruling request,
in response to specific questions posed by the IRS on two issues.
The letter did not address the issue of EGPC's payment of taxes
on behalf of Amoco Egypt.
By May 1981, Amoco Egypt was frustrated in failing to reach
an agreement with EGPC, with an economic hardship clause being
the major obstacle. It recognized, based on EGPC's inconsistent
negotiating methods, that further obstacles might include the
readdressing of previously discussed issues, including language
in the agreements allowing EGPC to credit against its own tax
liability tax payments discharging Amoco Egypt's tax liability.
In August 1981, Amoco received a favorable ruling from the
IRS on the January 1981 ruling request. With minor reservations,
the ruling stated that EGPC's payment of Egyptian income taxes on
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