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set by the National Monetary Council;8 and (4) the loan complied
with other conditions set forth by the Ministry of Finance.
Decree-law 1,351, which was enacted on October 24, 1974,
authorized the National Monetary Council to temporarily reduce the
income tax on interest, commissions, and expenses remitted to
persons residing or domiciled abroad. On the same date that Decree-
law 1,351 was enacted, the Central Bank issued Resolution 305, which
temporarily reduced the tax on interest, commissions, and expenses
received on currency loans registered with the Central Bank from 25
percent to 5 percent.
Decree-law 1,411, enacted July 31, 1975, amended Decree-law
1,351 and allowed the National Monetary Council to: (1) Reduce the
income tax on interest, commissions, and expenses remitted to
persons resident or domiciled abroad, or (2) grant pecuniary
benefits to Brazilian borrowers receiving loans in foreign currency.
On August 5, 1975, the Central Bank issued Resolution 334,
which revoked Resolution 305, thereby reinstating the 25-percent
withholding tax on interest, commissions, and expenses paid on
currency loans registered with the Central Bank. The withholding
8 The National Monetary Council is a Government agency
responsible for economic programs. Its members include the
Finance Minister, the Central Bank’s president, and
representatives of the largest Brazilian commercial banks. The
Finance Minister presides over the council’s meetings. The
council acts through the Central Bank.
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Last modified: May 25, 2011