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withholding tax is stipulated law, * * * [the Central
Bank] must in practice perform these acts on behalf of
such persons.
(9) Considering, therefore, the peculiarity of the
relationship * * * the Central Bank/Federal Union and
the Central Bank/Final borrowers of the relent funds, I
believe that, as regards the funds that must be
released to those as yet unidentified borrowers in
Brazil, * * * [the Central Bank] must as a substitute
for such borrowers pay the income tax incident on the
interest from January 1, 1984 to the end of the period
of availability for such funds to be relent.
(10) On account of the foregoing, there are the
following consequences to the transactions in question:
(a) payment of withholding tax is due and the
calculation base should be adjusted * * * [i.e.,
grossed up];
(b) as there are innumerable lenders and income is
received through an agent bank which will then
distribute it, the DARF may be issued in the name of
the agent to simplify the payment;
(c) if there is a Convention to avoid double
income taxation signed with countries in which
beneficiaries are domiciled, the rates established in
the conventions shall be applied to that portion of the
income corresponding to each;
(d) once the tax has been made, the pecuniary
benefit established in * * * Decree-law No. 1351/74 is
applicable, with the wording given by * * * Decree-law
No. 1411/75;
(e) in completing the DARF, the code to be used is
code 0393 and, as no Certificate of Registration is
issued in these transactions, “Brazilian Financing
Plan” may be indicated in the appropriate space, as the
reference to the certificate is merely a control
requirement.
(11) As regards the delay in paying the tax not
withheld, if the taxable event occurs while the inquiry
is pending, the tax must be paid with monetary
correction and without penalties * * *.
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