Riggs National Corporation & Subsidiaries (f.k.a. Riggs National Bank and Subsidiaries) - Page 1

                                   107 T.C. No. 18                                    

                               UNITED STATES TAX COURT                                

                     RIGGS NATIONAL CORPORATION & SUBSIDIARIES,                       
          (f.k.a. RIGGS NATIONAL BANK AND SUBSIDIARIES), Petitioner v.                
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 24368-89.                 December 10, 1996.                

                    P regularly made and participated in loans to                     
               borrowers located in foreign countries, including Brazil.              
               It was one of hundreds of banks that were involved in the              
               restructuring of Brazil's foreign debt.                                
                    As required by Brazilian law, various non-tax-immune              
               Brazilian borrowers paid Brazilian withholding tax on                  
               their net loan interest remittances to P during 1980                   
               through 1986.  Although the Brazilian Supreme Court had                
               held that, under Article 19 of the Brazilian                           
               Constitution, tax-immune Brazilian governmental entities,              
               like the Central Bank, were not liable to pay withholding              
               tax on their net loan interest remittances to foreign                  
               lenders, beginning in 1984, the Central Bank purportedly               
               paid withholding tax on its Brazilian restructuring debt               
               interest remittances to P.                                             

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