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There is no further debate on whether [withholding of]
income tax can be demanded in the remittance of interest
to another country, by virtue of art. 11, sole paragraph
of Law-Decree 401, of 30 December 68, coupled with art.
1 of Law-Decree 1215, of 4 May 72, RE 76,792- Plenary
Session (D.J. of 11 October 74, p. 7480), and I ruled
this way in the RE 78,988-SP, on 18 March 75.
What is at issue, however, is the application of the
sole paragraph of art. 11 of the Law-Decree 401/68,
notwithstanding the immunity guaranteed to the remitter
by virtue of art. 19, III, a, by the Federal
Constitution.
The First Division, in RE 79,157 [the Parana I--1st
Panel decision], held as follows:
The tax is payable, even though the
corporation * * * [by] constitutional law is
immune, for otherwise the beneficiary of the
immunity would not be the State, but the
foreign creditor. * * *
I believe that the precedent invoked [the Parana I--
1st Panel decision] does not apply to the present case.
In fact it has been expressly stipulated that, at any
time and for any reason, any fiscal or parafiscal [(i.e.,
tax)] burden shall be the responsibility of the State of
Parana.
It is argued that said contractual provision
* * * does not matter in the unraveling of the
dispute, because the beneficiary of the interest would be
the foreign creditor, which is not immune.
But such is not so, in my opinion, * * * because,
according to the sole paragraph of art. 11 of * * *
[Decree-law 401], the constitutionality of which also is
not at issue, the creditor is not responsible for the
payment of income tax.
The aforementioned sole paragraph states explicitly:
"For purposes of this article, it is
considered that the fact generating taxation
is the remittance to another country and the
remitter is the contribuente."
Now, in the present case, the generating fact is the
remittance of interest on the loan owed by the State of
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