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issue a separate DARF to that foreign lender specifying the
withholding tax that had been paid by the Central Bank on that
foreign lender’s behalf on the interest remittance. Rather, the
aforementioned 324 DARF’s the Central Bank issued to the foreign
lenders and their agent banks were group DARF’s. Each DARF covered
the collective withholding tax the Central Bank had paid on behalf
of an entire group of foreign lenders subject to a particular
withholding tax rate (i.e., a 12.5-percent withholding tax rate, a
15-percent withholding tax rate, or a 25-percent withholding tax
rate). In its ruling request, the Central Bank, among other things,
requested and received the Brazilian IRS’s permission to issue these
group DARF’s. These group DARF’s and other supporting documentation
the Central Bank issued to the foreign lenders in connection with
its restructuring debt interest remittances are discussed infra.
As previously indicated, no withholding tax payments were made
by the Central Bank on the foreign lenders’ behalf on restructuring
debt interest remittances after March 28, 1988, the date the
Brazilian Finance Minister issued Portaria 164, which provided that
future interest payments on the restructured debt would not be
subject to withholding tax.
I. The Central Bank’s Continued Reports to the Foreign Lenders That
It Received a “Pecuniary Benefit” on Its Withholding Tax Payments
on Post-June 28, 1985, Restructuring Debt Interest Remittances to
Them
Notwithstanding that on June 28, 1985, the pecuniary benefit
had been reduced to zero, the Central Bank, in issuing DARF’s to the
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