Brazil’s ReData data center bill has been approved by the country’s Senate.

On Tuesday (the 1st), the Federal Senate approved Bill No. 278/2026, which establishes the Special Taxation Regime for Data Center Services (ReData).

The vote was symbolic, with no objections, and the bill now proceeds to the president for approval, with notification to the Chamber of Deputies.

The bill was approved with drafting amendments Nos. 40 and 41, and with adjustments proposed on the floor by the rapporteur, Senator Cid Gomes (PSB-CE), whose report retained the environmental, regional, and research and development provisions established by the Chamber of Deputies. Before the vote, Senators Tereza Cristina (PP-MS), Jaime Bagattoli (PL-RO), and Eduardo Braga (MDB-AM) withdrew their requests to highlight specific amendments.

The main point of disagreement came from senator Laercio Oliveira, who advocated for the inclusion of natural gas among the renewable energy sources for data centers. The solution reached by the Plenary was a drafting change: instead of listing specific sources, the text now requires energy from “low-emission” sources, which paved the way for unanimous approval.

The legislative process had been dragging on since Provisional Measure No. 1,318/2025 expired in February. The Chamber of Deputies had approved ReData on February 25, but the Senate removed the bill from the agenda that same day, postponing the vote for months under pressure from companies, associations, and parliamentary caucuses in the sector. The resumption of proceedings was part of a concerted joint effort by President Luiz Inácio Lula da Silva, senate president Davi Alcolumbre (União-AP), and house speaker Hugo Motta (Republicanos-PB).

ReData suspends federal taxes for five years — Import Tax, IPI, PIS/Cofins, and PIS/Cofins-Import — levied on information and communication technology components and equipment intended for authorized data centers, with these taxes converted into exemptions once the required conditions are met. The program also modifies the criteria for reviewing imports, replacing the concept of “no domestic equivalent” with “no equivalent domestic production.”

The projected decline starting in 2027—to R$1 billion (US$200m) in 2027 and R$1.05 billion (US$210m) in 2028— is linked to the transition of the consumption tax reform, which eliminates the PIS and Cofins taxes and reduces the IPI to zero, with exceptions related to the Manaus Free Trade Zone.

Among the required conditions, beneficiary companies must meet their entire contractual electricity demand with renewable or low-emission sources, maintain water efficiency at or below 0.05 liters per kWh in cooling systems, and publish sustainability reports. They will also be required to invest an amount equivalent to two percent of the value of the equipment covered by the incentives in research and development, with at least 40 percent of these funds allocated to the North, Northeast, and Central-West regions.

Companies will also need to allocate at least ten percent of the installed capacity eligible for incentives to the domestic market—a requirement that may be fulfilled by providing capacity to scientific and technological institutions, government agencies, or through additional investments in research and innovation.

ReData receives welcome

For Victor Arnaud, president of Equinix in Brazil, the approval of ReData represents a decisive step toward making the country more competitive in global investment decisions regarding digital infrastructure

He said the program reduces the cost of introducing new technologies into the country and, in exchange, imposes conditions, such as the use of renewable or low-emission energy, water efficiency, investment in local R&D, and the reservation of capacity for the domestic market.

Pedro Moniz, CEO of Quadrante in Brazil and Chile, added that the approval of ReData is an important step toward creating more favorable conditions for the expansion of data centers in Brazil.

Leonardo Senra, CRO at Omid, said ReData could accelerate the construction of data centers in Brazil. But he warned, more data centers in the country do not necessarily mean greater technological autonomy or digital sovereignty if the incentive primarily serves to bring more capacity to foreign players.

Alex Sasaki, Vertiv’s VP for Latin America, added that the new policy is drawing the attention of leaders from other Latin American countries already seeking to accelerate their own AI agendas. He said that ReData positions Brazil as a model by demonstrating how a country can bring together the necessary capabilities to attract investments in AI-focused data centers, combining the new tax policy with already established factors such as a clean energy mix, a skilled workforce, and a mature digital culture.

This piece was automatically translated from DCD’s Portuguese site and edited by a member of DCD staff.