Brazil implements Redata tax regime for data centers

Brazil is working to implement the Special Taxation Regime for Data Center Services (Redata), established by Law No. 15,504/2026. The program aims to attract digital infrastructure investment by offering tax incentives, provided that data centers meet strict energy requirements. Specifically, the law mandates that all electricity demand must be met through contracts or self-production from renewable or low-emission sources.

A coalition of 32 entities from the technology, energy, and industrial sectors is currently pressuring President Lula to issue the necessary decree to activate the regime. These groups are advocating for technological neutrality in energy sources—suggesting the inclusion of natural gas alongside solar, wind, and hydro—to ensure the continuous and reliable power supply required for intensive data operations.

Discussions are also focused on the list of eligible equipment for tax suspensions. Industry representatives, including members of Abinee, have met with the Ministry of Development, Industry, Commerce and Services (MDIC) to ensure that the regulation protects national manufacturing. They are requesting that incentives not be granted to imported goods when equivalent domestic products are available, aiming to maintain the competitiveness of Brazil’s local industrial base.