Brazil’s President Luiz Inácio Lula da Silva signed the Special Taxation Regime for Data Center Services, known as ReData, on Sept. 15, creating a tax framework for cloud and artificial-intelligence infrastructure. Law No. 15,504 followed the Senate’s approval of Bill 278/2026 on Sept. 1. The Senate approved the measure without substantive changes after the Chamber of Deputies passed it in February under an urgent procedure. The law links tax relief to domestic capacity, investment, energy sourcing and water efficiency, turning the incentive package into an infrastructure policy as well as a tax measure.

ReData Creates A Tax Break For Data Center Equipment

ReData suspends Import Tax, IPI, PIS/Pasep, Cofins and their import versions on qualifying information and communications technology equipment that companies buy in Brazil or abroad for eligible data centers. The suspension lasts five years and can convert to a zero tax rate after beneficiaries meet their commitments and incorporate equipment into fixed assets. Import-tax relief applies only to products that have no equivalent made in Brazil, while the Manaus Free Trade Zone retains separate treatment for certain locally manufactured products. The government estimates tax relief of 5.2 billion reais in 2026, followed by 1 billion reais in each of the next two years.

The incentive addresses Brazil’s dependence on overseas digital infrastructure. The Finance Ministry says about 60% of Brazilian digital workloads run outside the country, driving demand for domestic cloud, high-performance computing and AI capacity. ReData covers facilities that handle data storage, processing and management, including AI model training and inference. The program therefore targets equipment costs while also addressing where Brazil’s expanding digital workloads run.

Domestic Capacity Becomes A Condition Of Tax Relief

Companies entering ReData must direct at least 10% of their effective processing, storage and data-treatment capacity to the Brazilian market. That capacity can serve private customers or support research institutions and public authorities without charge. The law also requires companies to invest an amount equal to 2% of products purchased with ReData benefits in research, development and innovation. Companies in the North, Northeast and Center-West receive a 20% reduction in those commitments, creating a regional incentive within the regime.

Energy and water rules add another layer. Operators must meet their electricity demand through supply contracts or self-generation using low-emission or renewable sources and maintain Water Usage Effectiveness of no more than 0.05 liter per kilowatt-hour for equipment cooling. Companies must publish sustainability reports covering water efficiency, electricity sources and other indicators that regulations define. These requirements put resource efficiency alongside tax compliance as AI infrastructure increases power and cooling demand.

Brazil Builds Compliance Into The Incentive

The Ministry of Finance will authorize entry into ReData, while the Ministry of Finance and the Ministry of Development, Industry, Foreign Trade and Services will oversee the program. Companies that fail to meet most commitments must repay suspended taxes with interest and penalties, while failure to satisfy the domestic-capacity requirement triggers suspension of benefits on new equipment purchases. If a company does not correct that breach within 180 days of notification, ReData automatically cancels its authorization. The framework makes tax relief conditional on measurable operating and resource commitments.

ReData gives Brazil a mechanism to influence where digital-infrastructure capital flows. Regional projects can receive reduced commitments, while investment obligations can support digital-industry programs. As a result, the regime connects equipment purchases with domestic computing capacity, clean-energy sourcing and technology development. For developers and cloud operators, the next phase will depend on regulations defining eligible equipment, reporting, compliance and entry.