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foreign tax credits petitioner should claim in connection with these
post-June 28, 1985, restructuring debt interest remittances,
petitioner’s International Division reported that a Brazilian tax
rate of “60 percent of 25 percent” had been imposed on the grossed-
up interest payments. On its 1985 through 1987 returns, petitioner
thus reduced by 40 percent its claimed foreign tax credits for
Brazilian tax on interest paid by Brazilian borrowers after June 28,
1985.
C. Certain Other Payment Evidence Offered by Petitioner
As Joint Exhibit 697-ZS reflects, in addition to the DARF’s the
Central Bank issued, the record contains a number of purported
letters the Central Bank issued to Banco do Brazil in connection
with the Central Bank’s alleged restructuring debt withholding tax
payments. In these letters, the Central Bank ostensibly advised
Banco do Brazil that it had credited Banco do Brazil’s Banking
Reserves Account at the Central Bank with the amount of the
purported tax payments covered in the copies of the DARF’s the
Central Bank was also enclosing to Banco do Brazil.
Petitioner has further offered the testimony of Rolf von
Paraski, its expert on how Banco do Brazil (the Brazilian
Government’s agent for payment of taxes) accounted for its
withholding tax collections. Mr. von Paraski examined one purported
withholding tax payment of the Central Bank on its July 1985 phase
II DFA interest remittances to the foreign lenders, which he
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