Riggs National Corporation & Subsidiaries - Page 26




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         40 percent, the amount of the pecuniary benefit before June 28,              
         1985.  After June 28, 1985, petitioner continued to reduce its               
         amount   of   claimed   foreign  tax   credits  by 40 percent for            
         withholding taxes claimed on interest payments from Brazilian loans,         
         even though the pecuniary benefit had been reduced to zero as of             
         June 28, 1985.                                                               
              In its amended petition, petitioner asserted, among other               
         things, that the foreign tax credit otherwise allowable to it for            
         1980 through 1986 should not be reduced by the pecuniary benefit             
         provided to Brazilian borrowers.                                             
              In the Stipulation Of Settled Issues filed with the Court on            
         May 30, 1996, the parties agreed:                                            
                   A.   On June 28, 1985, the Brazilian government                    
              effectively eliminated the subsidy/pecuniary benefit                    
              program by reducing the amount of the subsidy from 40% to               
              zero.                                                                   
                   B.   On its income tax returns for the taxable years               
              ended December 31, 1985 and December 31, 1986, Petitioner               
              reduced the amount of its claimed foreign tax credits for               
              Brazilian tax on interest paid by Brazilian borrowers by                
              an amount representing the subsidy/pecuniary benefit,                   
              even though Brazil reduced the subsidy/pecuniary benefit                
              from 40% to zero on June 28, 1985.                                      
                   C.   To the extent otherwise allowable, Petitioner’s               
              foreign tax credits for taxes paid after June 28, 1985                  
              through December 31, 1986 are not subject to  * * * [any                
              reduction for a pecuniary benefit]                                      
              The total foreign tax credits in dispute between the parties            
         in connection with the Central Bank’s restructuring debt interest            
         remittances to petitioner are as follows:                                    






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