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credit. Implicated in this issue is the application of the "act
of state" doctrine.
(3) Whether the taking of the credit by EGPC for Amoco
Egypt's taxes should be treated as a tax exemption, refund, or
subsidy so as to require the conclusion that the Egyptian income
taxes were not paid within the meaning of section 901. Analysis
of this issue involves, among other considerations, the question
whether EGPC, whose surplus was paid annually to the ARE, should
be treated as an integral part of, or a separate entity from, the
Government of the ARE and, in this context, whether the
characterization of a subsidy can apply where the funds involved
are, at all times, funds of the ARE.
(4) Depending on our resolution of the foregoing issues,
the impact on petitioner's foreign tax credits of the difference
in exchange rates between the time of the payments by EGPC during
the years in issue and its payment of its back taxes after the
disallowance in 1992 of the credits it took for Amoco Egypt's
taxes.
One additional comment is necessary before turning to a
detailed consideration of the above-described issues. Throughout
these proceedings, respondent has sought to capitalize on the
alleged variations over the years in petitioner's and its
counsel's approach to the situation involved herein and on the
activities of representatives or officers of petitioner and Amoco
Egypt, including their counsel. Respondent has expressly
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