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allowing a foreign tax credit for the ACT paid by a first-tier
subsidiary, even if that corporation allocates the corporate
offset to one of its subsidiaries, results in no extra burden
upon the U.S. Treasury.
On the basis of the foregoing analysis, we hold that,
pursuant to Article 23(c)(1) of the U.S.-U.K. Convention, the
payor of the ACT is the corporation that pays the dividend and
the corresponding ACT, regardless of that corporation's use of
the corporate offset or allocation of that offset to one of its
subsidiaries.9 Accordingly, section 902(a) applies to the
dividend received by petitioner in 1992. Petitioner, therefore,
is entitled to a foreign tax credit under section 901(a) for the
payment of the ACT. We have considered the parties' remaining
arguments and find them irrelevant or unnecessary to reach.
To reflect the foregoing, and the prior opinions in the
instant case,
An appropriate order will
be issued.
9 We have been able to ascertain the intent of the signatories
from the plain meaning of the language of Article 23 as well as
from the structure of the U.S.-U.K. Convention itself.
Consequently, we have not relied on extraneous statements made by
the various parties to the treaty negotiations and attached to
petitioners' motion.
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