ARTICLE 25

Relief from Double Taxation

In order to avoid double taxation, each Contracting State agrees in this Article to provide to its citizens or residents a credit against its taxes for taxes paid by such persons to the other Contracting State.

In paragraph (1), the United States agrees to allow a Unite4 States citizen or resident as a credit against United States tax an appropriate amount of taxes paid or accrued to Egypt in accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle of paragraph (1)). In addition, in the case of a United States corporation owning at least ten percent of the voting stock of an Egyptian corporation from which it receives dividends in any taxable year, the United

States will allow a credit for the appropriate amount of taxes paid or accrued to Egypt by the Egyptian corporation paying such dividends with respect to the profits out of which such dividends are paid. The appropriate amount will be based upon the amount of tax paid or accrued to Egypt, but the credit is not to exceed the limitations (for the purpose of limiting the credit to the United States tax on income from sources within Egypt or on income from sources outside the United States) provided by United States law for the taxable year. This provision does not require the United States to maintain a per-country or overall limitation in the future so long as the general principle of a foreign tax credit remains in effect. For the purpose of applying the United States credit in relation to taxes paid or accrued to Egypt, the rules set forth in Article 4 (Source of Income) will be applied to determine the source of income, and the taxes referred to in paragraphs (1)(b) and (2) of Article 1 (Taxes Covered) will be considered to be income taxes. Whether Egyptian taxes are paid or accrued is determined under the rules of the Code. A taxpayer may, for any year, claim a foreign tax credit under the rules of the Code. In that case, he would forego the rules of the Convention that guarantee income tax status for the specified Egyptian taxes.

Under paragraph (2), Egypt will allow a resident of Egypt as a credit against Egyptian tax the appropriate amount of income taxes paid or accrued to the United States and, in the case of an Egyptian corporation owning at least ten percent of the voting stock of a United States corporation from which it receives dividends in any taxable year, will also allow credit for the appropriate amount of taxes paid or accrued to the United States by the United States corporation paying such dividends with respect to the profits out of which such dividends are paid. The appropriate amount will be based upon the amount of tax paid or accrued to the United States but will not exceed that portion of Egyptian tax which such resident's net income from sources within the United States bears to his entire net income for the same taxable year. For the purpose of applying the Egyptian credit in relation to taxes paid or accrued to the United States, the rules set forth in Article 4 (Source of Income) will be applied to determine the source of income.

Paragraph (4) of Article 6 (General Rules of Taxation) provides that the saving clause in paragraph (3) of that Article does not affect the benefits conferred under this Article. Thus, the provisions of this Article may be relied upon by a citizen or resident of a Contracting State.