Brazil’s Congress has approved tax exemptions for equipment used by data centres, in a move designed to attract investment in the country’s digital infrastructure and artificial intelligence sector. The measure was approved by the Senate on Tuesday, 1 September, after passing the lower house, and will now be sent to President Luiz Inácio Lula da Silva for ratification. ([investing.com](https://www.investing.com/news/economy-news/brazils-congress-approves-tax-exemptions-to-attract-data-center-investments-4884731))
The bill creates the Special Tax Regime for Data Centre Services, known as Redata. It suspends federal taxes on the purchase and import of technology equipment, including servers, electronic components, storage systems and refrigeration infrastructure.
The measures cover import duties, PIS and Cofins, taxes applied to imported goods and Brazil’s industrial products tax, or IPI. The tax suspension is intended to become a permanent exemption once companies meet the conditions attached to the scheme. ([camara.leg.br](https://www.camara.leg.br/noticias/1247282-camara-aprova-incentivo-fiscal-para-investimentos-em-centros-de-processamento-de-dados))
Companies seeking the benefits will have to reserve at least 10% of their new data-processing, storage and data-management capacity for the Brazilian market. They will also be required to meet sustainability standards, including covering their electricity needs through clean or renewable sources.
The approved rules further require beneficiaries to invest 2% of the value of the incentive in research, development and innovation in Brazil. Import-duty relief will apply only to equipment without a similar product made domestically, while certain eligible components manufactured in the Manaus Free Trade Zone will qualify for the IPI suspension. ([camara.leg.br](https://www.camara.leg.br/noticias/1247282-camara-aprova-incentivo-fiscal-para-investimentos-em-centros-de-processamento-de-dados))
The government estimates that the exemptions could amount to about 5.2 billion reais (£690 million) in 2026, followed by 1 billion reais in each of the next two years, according to figures cited by the Chamber of Deputies.
The initiative revives a policy first introduced through an executive order in 2025. That measure expired on 25 February after Congress failed to vote on it, leaving the incentives dependent on the new legislation. The replacement bill was proposed by José Guimarães, who was then the government leader in the lower house and is now Brazil’s minister for institutional relations. ([camara.leg.br](https://www.camara.leg.br/noticias/1247282-camara-aprova-incentivo-fiscal-para-investimentos-em-centros-de-processamento-de-dados))
Brazilian lawmakers have presented the tax regime as a way to reduce the country’s reliance on overseas data centres and strengthen its position in cloud computing, high-performance computing and artificial intelligence. The proposal’s passage comes as demand grows for facilities capable of storing and processing the large volumes of data required by newer digital services. ([camara.leg.br](https://www.camara.leg.br/noticias/1247282-camara-aprova-incentivo-fiscal-para-investimentos-em-centros-de-processamento-de-dados))
