“Cause” and the Rationale of Application of the Exclusive withholding Tax on Payments to an Unidentified Beneficiary or without Cause

Abstract

This article aims to analyze the correct application of Article 61 of Law No. 8.981/1995, especially with regard to the definition of “cause” in the context of its rationale. To analyze the issue, it will be necessary to (i) delimit the current paradigms of taxing the results of illicit acts; (ii) investigate the meaning of the term “cause” in the context of the standard under analysis; (iii) investigate the institute of exclusive withholding tax in the specific case; and (iii) verify the current application of the rule in recent cases at the Administrative Tax Court. In the end, it will be argued that the “cause” sought by Article 61 of Law No. 8.981/1995 cannot be the one brought by Civil Law, under penalty of denaturing the IRRF as a tax, as it would be a rule that describes sanction of unlawful act. Thus, the “cause” must be an act or operation capable of identifying the correct taxation of income, if any, even if this cause is illicit in nature.