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For purpose of this article, the remittance to a
foreign country is considered the generative fact of tax,
and the remitter is considered the contribuente.
L. SRF 368 and FIRCE 80
On June 10, 1980, Secretary Francisco Dornelles (Dornelles),
the head of the Brazilian equivalent of the Internal Revenue
Service (Brazilian IRS), issued SRF 368 to the head of the Central
Bank's Department of Foreign Capital Fiscalization and Registration
(FIRCE). SRF 368 was an "officio", a formal written communication
between two governmental agencies that is binding upon the
governmental agencies. SRF 368 stated, in pertinent part:
Subject: Notification of waiver of payment of income
tax on remittances abroad
Ref. Off. Let. FIRCE-1-0-80/059, dated 6/3/80
Dear Sir:
In reply to the above mentioned official letter, of
interest to your Department, I hereby inform you, for
such measures as you may deem necessary, that, in the
exercise of the powers delegated to me by MF
Administrative Ruling 648/79, I AUTHORIZE the waiver of
payment of withholding income tax incident on the
remittance of interest and other legal charges on behalf
of Banco do Brasil S/A-Grand Cayman Branch with respect
to the foreign loan transaction in the amount of $60
million contracted by the Federative Republic of Brazil,
Ministry of Foreign Relations at that bank.
* * * * * * *
2. I would also like to take this opportunity to inform
you of the directive contained in SRF Official Letter no.
1016 dated 12/26/79 addressed to DECAM (Departmento de
Cambio) [Department of Foreign Exchange], according to
which the Central Bank of Brazil, independently of any
prior statements made by this Secratariat, is authorized
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