I've been doing some freelance work for a few months and received money directly to my account, but I haven't reported it to the tax authority. Now I'm scared of getting caught. What exactly is the fine I could face if this gets discovered?
The Tax Authority can apply a fine ranging from 30% to 150% of the taxes you should have paid, depending on how serious the situation is. If the amounts are small and it's your first time, you might get away with the lower end, but if it's a larger sum or if you take a long time to sort it out, then it gets messy. On top of that there are late payment interest charges that keep piling up.
The best thing you can do is regularize this already. You can file a late tax return to the Tax Authority with all your income from when you started. Technically you'll still have penalties, but it's way better than getting caught and ending up with much bigger fines. Contact an accountant or the Tax Authority's customer service desk, explain the situation and get it sorted while you still can.
Just to be clear: the longer you wait, the worse it gets. The interest accumulates, the fine can go up if they think you were negligent on purpose. If you act now, you show good faith and you usually manage to get a significant reduction in penalties. It's really worth sorting this out now rather than living in fear for years.
The situation is more complex than just a percentage penalty. If you didn't declare anything and received money, the tax authority can charge back taxes (progressive, from 7.5% to 27.5% depending on your bracket) PLUS a penalty for failing to file. That penalty usually ranges between 75% and 150% of the tax owed, but there's a minimum penalty that's around R$ 165 or more. The problem is the longer you go without declaring and the larger the amount you omitted, the heavier it gets.
What helps in your situation is that they found out about this while you're still alive to correct it, basically. If you go to the tax authority now and file an amended return, explain that it was unintentional omission (and it really does seem to be the case considering it was informal freelance work), you have a real chance of getting a significant penalty reduction. There are people who've gotten 50% or more reductions when they regularize in good faith. If you wait to be caught, then things get ugly because it looks intentional.
My suggestion: don't panic about this. Get in touch with an accountant or even the Federal Tax Authority to clarify exactly how much you received, in what periods, and file an amended return as soon as possible. The cost of regularizing now is way less than what you'd pay if you wait and get hit with an official assessment later.
I've seen people having to straighten this out later and honestly the worst part isn't just the percentage fine - it's that the Federal Revenue Service charges late-payment interest (around 0.33% per day) on the overdue tax, and that grows fast. If you've received small amounts and file a corrected return now, depending on how much you owe, it can be way more manageable than waiting for them to find out. The best thing is to calculate how much tax you should have paid on that income and sort it out before it becomes a snowball.
The worst part is that you get caught in a snowball effect: on top of the percentage fine and daily accruing late-payment interest, there's the question of how long it went undetected. The longer you go without filing, the more suspicious it looks, and then the tax authority can investigate whether there was bad faith or deliberate tax evasion, which makes things way worse. The smartest move is to sort this out right now while it's still "recent" - find an accountant who works with freelancers, because they know exactly how to classify your income and might even be able to request amnesty depending on the amount and how long it's been.
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