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Q. The Brazilian IRS's March 1984 Private Ruling to the Central
Bank
On or about December 28, 1982, the head of FIRCE submitted a
"consulta" or ruling request by the Central Bank to the Brazilian
IRS. The December 28, 1982, consulta stated, in pertinent part:
Subject: Withholding tax levied on interest on
* * * [proposed phase I DFA and phase I CGA].
Mr. Secretary,
In the next few days, the Central Bank of Brazil will
enter into, with the international financial community,
* * * [the proposed phase I DFA and phase I CGA].
* * * * * * *
2. In contracting these * * * [agreements], the
Central Bank * * * will act in the capacity of Agent
of the Federal Government in implementing the foreign
exchange policy determined by the National Monetary
Council.
3. Therefore, all the financing charges resulting from
the above agreements will be for the account of the
National Treasury, which will be responsible for the
respective services related to payments and remittances.
4. During the negotiations for such Agreements, the
Brazilian Authorities assumed the commitment to provide
the creditors with withholding receipts (DARF's) for the
withholding tax paid on the interest payable by the
Central Bank on the funds of * * * [the phase I DFA
and phase I CGA], during the period in which such funds
remain deposited at the Central Bank and available for
relending to borrowers in Brazil.
5. In view of the special characteristics of these
transactions, we hereby request your opinion on the
matter, pointing out that the following has already been
negotiated with the creditor bankers:
(a) issuance of the DARF's in the names of
the agent bank of * * * [the proposed
phase I DFA and phase I CGA], considering that
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