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phase II CGA restructuring debt interest remittances to the foreign
lenders on December 30, 1985, and on March 26, 1986. In this August
1986 letter, Morgan Bank discussed certain group DARF’s and
supporting schedules the Central Bank had issued (copies of which
Morgan Bank was forwarding to the foreign lenders) to evidence the
Central Bank’s withholding tax payments on those respective interest
remittances. Among other things, Morgan Bank’s August 1986 letter
stated that the Central Bank schedules reflected that in connection
with the withholding tax imposed on each specific interest
remittance to a foreign lender: (1) The Central Bank received a
“40% cruzados tax rebate amount” (i.e., pecuniary benefit);12 and
(2) there was a resulting “balance (60%) of actual tax paid”.
On the basis of the aforementioned and other similar Central
Bank tax payment documents issued to the foreign lenders (which
erroneously reported the Central Bank was continuing to “receive”
a “40-percent pecuniary benefit” in connection with its post-June
28, 1985, restructuring debt interest remittances to the foreign
lenders), petitioner mistakenly believed the Central Bank had
received a “40-percent pecuniary benefit” in connection with all of
the Central Bank’s restructuring debt interest remittances to
petitioner from July 1985 through at least January 1987. Indeed,
in a memorandum dated February 20, 1986, to petitioner’s
12 By this time, the cruzado had replaced the cruzeiro as
Brazil’s new currency.
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