Brazil tax incentive and regulation updates

Brazil has introduced new regulatory measures regarding tax incentives for digital infrastructure and multinational corporations.

Following the publication of Law No. 15.504/2026, the country implemented the Redata tax regime. This special regime offers incentives for companies that install, modernize, or expand data centers in Brazil. To qualify, companies must dedicate at least 10% of their processing and storage capacity to the Brazilian market and adhere to sustainability standards, such as using renewable energy and water-efficient cooling technologies. The incentives include the suspension of taxes like PIS/Pasep, Cofins, and IPI on the acquisition or import of electronic components and IT products.

Concurrently, Brazil’s Federal Revenue Service has integrated OECD rules into its global minimum taxation regulations via Normative Instruction RFB No. 2,342/2026. This introduces the GloBE Simplifier Rule for Substance-Based Tax Incentives (RSGIF), allowing multinational groups with annual revenues of €750 million or more to consider certain qualified tax incentives when calculating adjusted covered taxes. This measure is intended to help ensure a minimum effective tax rate of 15% on profits earned within Brazil.

In October 2026, a coalition of 32 entities from the technology, energy, infrastructure, and industrial sectors began pressuring the government to regulate the Redata program. Industry representatives are advocating for technological neutrality regarding energy supplies, suggesting that data centers utilize nuclear and natural gas alongside renewables to ensure continuous electricity. Additionally, manufacturers have met with the Ministry of Development, Industry, Commerce and Services (MDIC) to request clear definitions on equipment eligibility, urging the government to prioritize domestic production over imported goods to protect national competitiveness.