- 66 -
Andre I decision), holding that the municipality did not have to
pay withholding tax on its interest remittances as repass borrower
with respect to a Resolution 63 repass loan to construct a
municipal supply center. The loan involved in the Santo Andre I
decision was a net loan. The reporting Brazilian Supreme Court
Justice noted the prior Parana I--1st Panel and Parana II
decisions, but adopted and utilized the Parana II decision's
rationale for distinguishing the Parana I--1st Panel decision.
This Justice stated that the decision rendered in Santo Andre I was
"oriented in the same line of jurisprudence" as the Parana II
decision.
On April 13, 1993, a panel of the Brazilian Supreme Court
issued its ruling not to recognize the Brazilian Government's
appeal in Federal Union v. Municipal Prefecture of Santo Andre
(hereinafter for convenience referred to as the Santo Andre II
decision). The loan to the municipality in Santo Andre II was a
Resolution 63 repass net loan. In its appeal, the Brazilian
Government argued that the Parana II decision was distinguishable
and did not support holding the municipality to be immune from
payment of withholding tax, as the foreign loan in Parana II had
been directly made to the State of Parana.
D. The Parties' Experts
1. Petitioner's Experts.
Petitioner offered testimony on the applicable Brazilian law
concerning the Central Bank's liability for withholding tax on its
Page: Previous 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 NextLast modified: May 25, 2011