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with respect to each specific September 27, 1985, Central Bank
interest remittance to a foreign lender: (1) The withholding tax
imposed, (2) the “40-percent pecuniary benefit” the Central Bank
received, and (3) the “60-percent balance of actual withholding tax
paid”. For instance, with respect to the Central Bank’s September
27, 1985, phase II CGA, tranche I interest remittance to petitioner,
the Central Bank schedule reflected the following:
Net Interest Grossed-Up “Pecuniary “Balance
Remittance Int. Paid Tax Benefit” Tax Paid”
(U.S. $) (Cruzeiros)1 (Cruzeiros) (Cruzeiros) (Cruzeiros)
17,441.66 180,742,108.69 45,185,527.17 18,074,210.86 27,111,316.30
1 The Central Bank used the following formula to compute this amount:
Net int. remittance
Grossed-up = (foreign currency) x Applic. exchange rate
int. paid 1 - Withholding tax rate
(cruzeiros)
(On Sept. 27, 1985, the Central Bank used an exchange rate of
$1 (U.S.) to 7,772 cruzeiros.)
On or about January 21, 1986, Morgan Bank forwarded copies of
the aforementioned DARF’s and schedules that the Central Bank had
issued in connection with its September 27, 1985, phase II CGA
interest remittances to each of the foreign lenders participating
in the phase II CGA. The letter, dated January 21, 1986, by which
Morgan Bank enclosed these documents to the foreign lenders, stated,
in pertinent part:
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