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restructuring debt interest remittances from four expert witnesses:
(1) Geraldo Ataliba (Ataliba), a Brazilian university professor who
specializes in constitutional taxation, (2) Eivanny da Silva (da
Silva),28 a Brazilian tax lawyer who served as a top-level Brazilian
IRS official from 1982 through 1984 and was one of the principal
authors of the March 1984 private Brazilian IRS ruling issued to
the Central Bank, (3) Joao Guerra (Guerra), a Brazilian tax lawyer,
and (4) Jose Pedreira (Pedreira), a Brazilian tax lawyer.
Petitioner's experts were of the opinion that the applicable
Brazilian law with respect to the Central Bank's payment of
withholding tax on its net loan interest remittances abroad was
correctly presented in the Doniak-Kahan draft ruling that the
Brazilian IRS never issued. In other words, they maintained that
the Central Bank was subject to the same withholding tax collection
and payment rules as non-public-sector entities and was required to
pay withholding tax on all its interest remittances abroad,
including those with respect to the restructuring debt,
irrespective of the relending periods of the DFA's and CGA's.
They were further of the opinion that SRF 368 did not reflect
the applicable Brazilian law and was completely insupportable under
Brazilian law. Except for perhaps da Silva, all of petitioner's
experts opined that, under Brazilian law, there was no such legal
doctrine as the borrowers-to-be theory.
28 Petitioner offered da Silva as both a fact witness and
an expert witness on Brazilian law.
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