Paying the Lion’s Share

Every month in Brazil, individuals pay the “lion’s share” to the government. It’s not the lion’s share in the idiomatic sense, but rather a literal reference to the monthly income tax payment obligation for individuals known as carnê-leão.

The term carnê-leão originated from a publicity campaign in the 1980s when the Brazilian government wanted the public to understand that income taxes could be “tamed” like lions. However, they could also be “ruthless” if provoked. In other words, pay your taxes on time and you won’t have a problem.

If you’re a resident for tax purposes in Brazil, you too are subject to paying the carnê-leão each month. The tax applies to income from work, rent and pensions paid by individuals or sources outside Brazil. This includes payments by foreign companies as well as foreign governments.

Carnê-leão is calculated using Brazil’s progressive income tax table. This means that the more you earn, the higher the tax percentage you owe. For example, if you earn BRL 10,000 a month as a freelancer, that income would be subject to a 27.5% tax rate.

Payments are made with a DARF, a document available on the federal tax authority’s website. They are due by the last business day of the month following the date you received the income. And don’t be late; otherwise, you’ll be stuck paying penalties.

Brazil’s monthly income tax obligations are a real bear, particularly for foreigners. Fail to pay though and you’ll be in for a fight with the lion.