Riggs National Corporation & Subsidiaries (f.k.a. Riggs National Bank and Subsidiaries) - Page 69

                                       - 69 -                                         
          including the Parana I--1st Panel and Parana I--Full Bench                  
          decisions, was contrary to other Brazilian Supreme Court decisions,         
          including the Parana II decision.                                           
               Petitioner's experts were of the opinion that certain                  
          Brazilian Supreme Court decisions, including the Parana II                  
          decision, holding that public-sector entities were not required to          
          pay withholding tax on their net loan interest remittances abroad,          
          were incorrectly decided.  They maintained that these Supreme Court         
          decisions improperly extended and applied the taxation principles           
          of Decree-law 401 to foreign currency loans.  Guerra claimed that           
          the net-loan-versus-gross-loan rationale used in the Parana II              
          decision to distinguish the Parana I--1st Panel decision was                
          erroneous, but he acknowledged that this same rationale was applied         
          and utilized in the Santo Andre I decision.  He claimed that this           
          was a repetition of the error.                                              
               Some of petitioner's experts were further of the opinion that          
          Article 19 of the Brazilian Constitution would not prevent the              
          Central Bank and other Federal-level autarquias from being subject          
          to withholding tax on their net loan interest remittances, as               
          Article 19 of the Constitution, they claim, prohibits taxation only         
          between the different governmental levels.  According to them,              
          Article 19 prevents the Federal Government of Brazil from taxing            
          the assets, revenues, and operations of State and municipal                 
          governmental entities, but not the assets, revenues, and operations         






Page:  Previous  59  60  61  62  63  64  65  66  67  68  69  70  71  72  73  74  75  76  77  78  Next

Last modified: May 25, 2011