TAXATION AT SOURCE AND ITS IMPACT ON INCOME TAX

Abstract

The article systematically analyzes the tax liability attributed to third parties, with an emphasis on the taxation of income at source, a practice that obliges the paying agent to withhold and collect the tax owed by the taxpayer. The text discusses the historical evolution of this model in Brazil, the concept of income under Brazilian law, and the practical effects of withholding tax - either as an anticipation or as definitive taxation. The approach is from the taxpayer's perspective, seeking to understand the extent of the duties of withholding agents and tax substitutes. Based on a qualitative methodology, the study uses documentary and bibliographical analysis, as well as case studies, to illustrate the limits and challenges of the current model of taxation at source. The article criticizes, among other points, the lack of monetary correction on amounts withheld and the lack of efficient mechanisms for refunds, also pointing out social and economic impacts. In the end, it proposes reflections aimed at fostering debate on the effectiveness of the Brazilian tax system and possible reforms that could make it fairer and more functional.

DOI: https://doi.org/10.56238/sevened2025.021-060