Photo: screengrab from the official website of Brasil 247

By Brasil 247 - Brazil's Chamber of Deputies approved, by symbolic vote early Wednesday, a bill creating a Special Tax Regime for Data Center Services (Redata), sending the proposal to the Senate under a tight deadline as the provisional measure covering the subject is set to expire at midnight.

According to Valor, the text must be voted on by the Senate by 11:59 p.m. on February 25 to avoid the provisional measure (MP) lapsing. Rapporteur Aguinaldo Ribeiro (PP-PB) said there is an agreement for the Senate to vote on the bill on Wednesday and for it to be sanctioned the same day, within the legal timeframe.

The Redata regime is designed for companies implementing projects to install or expand data center services in Brazil, offering the suspension of federal taxes on the purchase and import of goods destined for fixed assets. The bill provides exemptions from PIS/Pasep, Cofins and the industrialized products tax (IPI) on the acquisition of information and communications technology (ICT) equipment.

In his report, Ribeiro framed the initiative as urgent amid global competition for critical digital infrastructure. "It is an investment that is not only a priority but essential for any nation seeking technological development," he wrote, adding that there is "a global race" among countries to secure the installation of this infrastructure and arguing Brazil must remove tax bottlenecks quickly.

To qualify for the incentives, firms must meet a set of counterpart obligations, including allocating part of installed capacity to the domestic market, ensuring all energy used comes from renewable sources, meeting strict water-efficiency targets, and investing a minimum share in research, development and innovation. Part of that R&D spending must be directed to Brazil's North, Northeast and Center-West regions. The regime is presented as tying tax relief to commitments on digital sovereignty, sustainability and strengthening the national production chain.

The estimated fiscal cost of the program is R$7 billion over the next three years, broken down as R$5.2 billion in 2026, R$1 billion in 2027 and R$1.05 billion in 2028. The projected decline is linked to the start of the transition period for new taxes under Brazil's tax reform.

Data center services, as described in the report, include infrastructure and computing resources for storing, processing and managing data and digital applications, spanning cloud computing, high-performance computing (HPC), and the training and inference of artificial intelligence models.

During deliberations, sectors tied to electricity and natural gas sought to broaden the bill's benefits to include their activities. The adopted position was to keep the scope limited to data centers and discuss broader issues within the AI regulation debate, which lawmakers expect to reach a vote in the Chamber by April.

(Reported by Brasil 247 on Feb 25, 2026 )