Redata: New tax incentives for data centers

The incentive provides for a five-year tax exemption on the purchase of electronic components and technology products

Law No. 15,504/2026, which reinstated the Special Taxation Regime for Data Center Services (Redata), created tax incentives for projects involving the installation, modernization, or expansion of data centers in Brazil.

The regime provides for the suspension of PIS/Cofins, PIS/Cofins-Import, IPI (Excise Tax), and Import Tax on the domestic purchase and import of certain electronic components and Information and Communication Technology (ICT) products intended for fixed assets.

After fulfilling the required conditions and capitalizing the assets as fixed assets, the suspension may be converted to a zero tax rate.

Who can use Redata?

Legal entities with projects to install, modernize, or expand data center services in Brazil, including activities related to cloud computing, high-performance computing, and the training and inference of artificial intelligence models.

There is also the possibility of co-participation by industrial suppliers of ICT products that have a contractual relationship to supply goods to the beneficiary.

To qualify for the program, certain conditions must be met, such as being in good standing with federal tax authorities, not being listed in the Cadin registry, and not being enrolled in the Simples Nacional tax regime.

Which taxes are covered?

Redata applies to various federal taxes, subject to the conditions established by law:

• PIS/Pasep and Cofins and PIS/Cofins-Import: These taxes apply only to products listed in an Executive Branch regulation.
• IPI: Applies to imports or goods leaving an industrial facility, except as provided by law for certain industrialized products manufactured in the Manaus Free Trade Zone.
• Import Tax: Applies only to goods for which there is no equivalent domestic production and that are listed in the relevant Executive Branch list.

Note: Imports may also be made on behalf of and at the request of a third party. Once published, the regulations listing eligible goods may only be amended to include new goods.

What are the requirements for joining Redata?

Use of Redata is contingent upon fulfilling a series of commitments.

These include allocating 10% of actual supply to the domestic market, with the option to substitute this with an additional 10% investment in R&D&I; the use of 100% electricity from supply contracts or self-generation from renewable or low-emission sources; and compliance with a Water Usage Effectiveness (WUE) limit of up to 0.05 L/kWh.

There is also a requirement to allocate 2% of the value of products purchased under the program to R&D&I, in addition to meeting sustainability criteria to be defined in regulations.

Projects located in the North, Northeast, and Midwest regions are subject to special conditions: commitments related to the domestic market and R&D&I are reduced by 20%, while at least 40% of the funds allocated to R&D&I must be directed to these regions.

In practice, what are the benefits for taxpayers who use Redata?

The incentives provide for a five-year suspension of the taxes mentioned above on the purchase (inside or outside Brazil) of electronic components or other ICT items.

Companies that sell equipment can also benefit, in the case of products used in the manufacture of computers intended for use in data centers.

Regulations will be crucial

The effective implementation of Redata still depends on supplementary regulations.

Among the issues that will need to be addressed are the conditions for qualification and co-qualification, sustainability criteria, and aspects related to the supply of energy from renewable or low-emission sources.

Questions also remain regarding the definition of “low-emission,” the potential requirement for additionality in contracted energy, and the use of emissions offset mechanisms, including carbon credits and carbon capture, utilization, and storage (CCUS/CCS) technologies.

Therefore, monitoring the rules to be published is essential for assessing the costs, obligations, and operational impacts associated with utilizing the program.

How DPC can support your company

Domingues e Pinho Contadores can assist you with eligibility analysis, tax implications, and monitoring compliance with the program’s obligations and regulations. Count on our support: dpc@dpc.com.br.