Brazil's President Lula signs ReData data center bill into law

Type: Development · Technology: Data Center · Country: Brazil · Value: $193.7M · Announced: 2026-09-15

On September 15, 2026, President Luiz Inácio Lula da Silva signed Bill 278/2026 into law, establishing the Special Taxation Regime for Data Center Services (ReData) at the Planalto Palace. The legislation creates tax incentives for the establishment of data processing centers focused on cloud computing and artificial intelligence, suspending import duties, IPI tax, PIS/Pasep taxes, and COFINS tax on ICT equipment for up to five years, becoming permanent after obligations are fulfilled. Companies registered under ReData must allocate at least 10 percent of data processing capacity to the Brazilian market, comply with sustainability criteria including renewable electricity use and a Water Efficiency Index below 0.05 liters per kWh, and invest an amount equivalent to two percent of product values purchased using benefits. The Ministry of Finance estimates the tax waiver will total approximately 5.2 billion reais ($1 billion) in 2026, with 1 billion reais ($193.7 million) projected for each of the following two years. Approximately 60 percent of Brazil's data and AI resources are currently processed abroad due to tax costs, and the law aims to reverse this trend while directing at least 40 percent of digital economy investments to the North, Northeast, Midwest, and regional development agency-covered areas.

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