INCOME TAX EXEMPTION ON THE DISTRIBUTION OF PROFITS AND DIVIDENDS: A THEORETICAL-COMPARATIVE ANALYSIS

Abstract

This research analyzes the constitutionality of the exemption from Income Tax levied on profits and dividends distributed in Brazil, provided for in Law No. 9,249/1995. An articulated analysis of constitutional normative foundations, empirical data from the Federal Revenue Service and the theoretical framework of justice as equity, by John Rawls, is used to evaluate the results of this fiscal policy from the prisms of contributory capacity, progressivity and distributive justice. It is based on the premise that the exemption, by benefiting mostly from the upper income strata, compromises the redistributive function of the tax system and contributes to the deepening of social inequalities. The research adopts a theoretical approach, combining principled and quantitative analysis, and demonstrates that the maintenance of this authorization reveals a mismatch with the constitutional objectives of the Republic, in addition to generating a significant waiver of revenue to the detriment of the financing of essential public policies. In the light of the Rawlsian principle of difference, the legitimacy of a tax model that exempts income from capital and burdens labor income is questioned. It is also considered that the perpetuation of this structure compromises the principle of universality of income taxation, provided for in the 1988 Constitution. The results indicate that the revision of the exemption policy is not only legally offensive, but socially necessary to enable a fairer, more equitable tax system committed to republican purposes.

DOI: https://doi.org/10.56238/sevened2025.011-006