- 38 -
payments. See supra note 16. In comparison, as was noted supra
note 17, the Central Bank’s letter of September 6, 1985 (Joint
Exhibit 692-ZN(22)), states the Central Bank was transmitting DARF’s
covering phase II CGA interest payments that had been made by the
Central Bank in January, March, April, and June 1985. Indeed, one
of the Central Bank schedule pages in Exhibit 692-ZN(22) covers
various interest payments made to petitioner and other foreign
lenders on January 16, 1985. In preparing this schedule page
covering those January 16, 1985, interest payments, the Central Bank
used an exchange rate of 3,381 cruzeiros to $1 (U.S.), not an
exchange rate of 7,772 cruzeiros to $1 (U.S).19 As was previously
discussed, the latter exchange rate of 7,772 cruzeiros to $1 (U.S.)
applicable on September 27, 1985, was used in preparing the Central
Bank schedules in Exhibit 692-ZN(23). See infra appendices A and
B.
Notwithstanding petitioner’s argument to the contrary, the
Central Bank schedules that Mr. Oliveira (a FIRCE division head)
19 This Central Bank schedule page (in Exhibit 692-ZN(22))
reflects that with respect to the Jan. 16, 1985, phase II CGA
interest payment of $18,465 (U.S.) to petitioner, the Central
Bank computed the “grossed-up interest paid” to be 83,240,220
cruzeiros. Considering the gross-up formula the Central Bank
employed, we calculate the Central Bank on Jan. 16, 1985, had
used an exchange rate of 3,381 cruzeiros to $1 (U.S.). In other
words, that was the applicable exchange rate the Central Bank
used in order to compute as follows that amount of “grossed-up
interest paid” on its $18,465 (U.S.) net interest remittance to
petitioner:
83,240,220 cruzeiros = $18,465 (U.S.) X 3,381 (cruzeiros per dollar)
1 - 25% withholding tax rate
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