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CARF suit against Santander Brasil for 9B reais; bank to appeal

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CARF suit against Santander Brasil for 9B reais; bank to appeal

Banco Santander (Brasil) SA said it received a letter seeking clarification over reports regarding a lawsuit filed by CARF, the Brazilian Administrative Council of Tax Appeals.

According to a Valor Econômico report, the bank lost a tax case worth 9 billion Brazilian reais in collection, regarding the non-withholding of income tax in the alleged capital gain of a particular foreign investor.

The case stems from a merger of shares in Banco ABN AMRO Real S.A. that took place in 2009, wherein Santander Brasil assumed control of Banco ABN AMRO. The case argued that as a result of the merger, there was a revaluation of assets and a capital gain, which should have been taxed; Santander Brasil argued there was no equity increase.

In a Form 6-K filed March 8, the bank said the case is subject to appeal and to questioning in judicial courts. Santander Brasil added that its legal council and advisers believe there is a remote chance of loss.

As of March 7, US$1 was equivalent to 3.24 Brazilian reais.