Data Center Tax Incentives

ReData Program Has Potential to Boost Digital Infrastructure Expansion in Brazil

The Brazilian market has a significant opportunity to emerge as a global leader in digital infrastructure this year, supported by a steady flow of regulatory advances. The debate around ReData – a provisory tax incentive regime for data center services – has gained new momentum, with proposals seeking to make the program permanent a signal of the sector’s interest in establishing stable guidelines for investment in technology and the digital economy. Discussions have reaffirmed the importance of ReData’s core pillars, first introduced by Provisional Measure No. 1,318/2025 and now taken up in Bill No. 278/2026, including tax relief on equipment, innovation incentives, and sustainability-related requirements with counterparties, pointing to a regulatory pathway aligned with international best practices for digital infrastructure.

These considerations remain top-of-mind for the market, and are taking on a more central role in the sector’s development. Targets for water‑use efficiency, renewable‑energy consumption, and minimum allocations to research and development are increasingly viewed as essential to the responsible expansion of data center infrastructure. Approval of ReData could unlock new projects, expand installed capacity, and encourage more geographically distributed facilities – benefits the industry is eager to realize. Consolidating this cycle would be expected to strengthen legal certainty and enhance Brazil’s attractiveness for large‑scale investment in technology, connectivity, and digital services, underscoring the need for clear, sustainable regulatory parameters to propel the country’s digital ecosystem.

High tax burdens and uncertainty regarding tax incentives discourage new investment. By establishing objective criteria and clear incentives, ReData reduces risk and provides data center projects with predictability

Leonardo Homsy

Partner – Tax

The establishment of ReData transforms isolated incentives into a foundational policy for the sector. Although the framework is still under discussion, its pillars point to increased regulatory predictability and add to advances in financing, sector regulation, and data protection, creating a more stable and sustainable environment for long-term investments in data centers

Natalia De Santis

Partner – Infrastructure & Energy

Brazil already offers several competitive advantages for data centers, including a largely renewable and cost-competitive energy matrix, international connectivity, and available land. With ReData, investments become even more attractive, giving Brazil the potential to become a leading global hub for the sector