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behalf of Amoco Egypt. Article III(g)(6) of the agreement
provides:
6. In calculating its A.R.E. income taxes, EGPC shall
be entitled to deduct all royalties paid by EGPC
to the Government and [Amoco Egypt's] Egyptian
income taxes paid by EGPC on [Amoco Egypt's]
behalf.
The Arabic version of the above provision does not include
the word "minha" as did the MCA at issue herein. The word
"minha" was not used at Amoco Egypt's request.
In a 1994 production sharing agreement entered into between
EGPC and Mobil, the English text includes a provision comparable
to Article IV(f)(6) herein, with the proviso, "but EGPC shall not
credit directly or indirectly CONTRACTOR'S Egyptian income taxes
against EGPC's Egyptian income taxes."
Notice of Deficiency
In calculating allowable foreign tax credits for the taxable
years 1979, 1980, 1981, and 1982, petitioner included Egyptian
income taxes paid on behalf of Amoco Egypt by EGPC, pursuant to
the MCA and other concession agreements between Amoco Egypt,
EGPC, and the ARE, in the following amounts:
Year Amount
1979 $304,015,893
1980 498,086,280
1981 557,873,428
1982 453,586,679
Amoco also included these amounts in its U.S. gross income. On
October 12, 1984, Amoco timely filed amended consolidated
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