- 69 -
Egyptian Government's various reviews of the MCA, there is no
discussion of the computation of taxes.
Respondent argues that intent can be found in the Egyptian
Government's review of the 1973 Mobil agreement. Respondent
refers to a report to the Egyptian State Council, in which it was
concluded that the provision, identical to Article IV(f)(6), in
effect put Mobil on equal footing with a party who enjoyed a tax
exemption. Respondent argues that, by this conclusion, the
Government intended Mobil, and later Amoco, to enjoy a tax
exemption. We are not persuaded. The report merely makes a
common-sense observation, similar to one that could be made about
the U.S. taxpayer in Example (3) of section 1.901-2(f)(2)(ii),
Income Tax Regs.12 Furthermore, there is no evidence that the
report was considered by the State Council or by the Egyptian
legislature, the People's Assembly. The authorization laws for
both the Esso and Mobil agreements were promulgated by
presidential decree, without being enacted by the People's
Assembly.
We find support for our conclusions that the MCA would have
been more explicit in allowing EGPC a credit if that was so
intended. There appears to have been no provision in the general
12 In Example (3) of sec. 1.901-2(f)(2)(ii), Income Tax Regs.,
the U.S. taxpayer's foreign tax obligation is assumed by the
government of the foreign country imposing the tax liability.
The example recognizes that the foreign tax is paid, although
there is no direct out-of-pocket payment from the U.S. taxpayer.
See infra p. 80.
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