Brazil enacts Law no. 15,504/2026 creating the REDATA Tax Incentive Regime

In brief

On September 15, 2026, Law No. 15,504/2026 was published in an extraordinary edition of the Brazilian Federal Official Gazette, amending Law No. 11,196/2005 to establish the Special Tax Regime for Data Center Services (REDATA) and, within the same legislative framework, reorganize the Special Tax Regime for the Information Technology Services Export Platform (REPES). The law became effective upon publication; however, a significant portion of its implementation remains subject to regulations and implementing acts to be issued by the Federal Executive Branch.

In more detail

Under REPES, the benefit remains available to legal entities predominantly engaged in software development or the provision of information technology services, excluding data center services, provided that they undertake an export commitment corresponding to at least 50% of their annual gross revenue derived from such activities.

REDATA, in turn, is intended for legal entities undertaking projects involving the installation, modernization, or expansion of data center services within Brazil. For these purposes, the legislation adopts a broad definition of data center services, encompassing infrastructure and computing resources dedicated to the storage, processing, and management of data and digital applications, including cloud computing, high-performance computing, the training and inference of artificial intelligence models, and related services.

In addition to companies directly responsible for data center projects, REDATA also allows for the co-enrollment of legal entities supplying industrialized information and communications technology products intended for incorporation into the fixed assets of an enrolled beneficiary. Such co-enrollment remains effective for as long as the contractual relationship underlying the supply of those goods continues to exist.
Access to REDATA benefits is contingent upon the assumption of a series of commitments by the enrolled beneficiary. In summary, the legislation requires the company to:

i.make available to the domestic market at least 10% of the effective processing, storage, and data management capacity installed with the support of the regime;

ii.comply with sustainability criteria and indicators to be established by an act of the Federal Executive Branch;

iii.satisfy its entire energy demand through renewable or low-emission sources;

iv.maintain a maximum Water Usage Effectiveness (WUE) index of 0.05 L/kWh; and

v.invest an amount equivalent to 2% of the value of goods acquired under the regime’s tax incentives in research, development, and innovation projects related to the digital economy supply chain.

With respect to tax incentives, REDATA provides for the suspension of the following taxes levied on domestic acquisitions and imports of electronic components and other information and communications technology products destined for the fixed assets of beneficiaries enrolled in the regime:

i.Import Duty (II);

ii.Excise Tax (IPI);

iii.PIS/Pasep and COFINS levied on revenue; and

iv.PIS-Import and COFINS-Import.

The tax suspension will be converted into a zero-rate benefit once the statutory requirements have been satisfied. Should these requirements not be met, beneficiaries will be required to pay the suspended taxes, together with accrued interest and late-payment penalties, calculated from the date of the respective taxable events.

The availability of the REDATA incentives is also contingent upon the Executive Branch issuing the relevant acts defining the products eligible for the regime. The legislation expressly contemplates the issuance of regulations establishing the information and communication technology products covered by the tax suspension, such that only electronic components and other goods expressly included in the relevant lists will qualify for the incentives provided under REDATA.

In addition to the general list of eligible products, the legislation establishes that the IPI suspension will not apply to electronic components and other information and communication technology products manufactured in the Manaus Free Trade Zone that are designated in a specific act to be issued by the Executive Branch. Accordingly, even if a product falls within the scope of goods generally eligible for REDATA, the IPI suspension will not be available if such product is included in the specific list of Manaus Free Trade Zone-manufactured products to be published by the Executive Branch.

With respect to Import Duty (II), the suspension is subject to the absence of an equivalent domestic product. For this purpose, the Executive Branch is required to identify, through a specific act, the electronic components and other information and communication technology products deemed not to have a domestic equivalent. As a result, the benefit will not apply to products for which equivalent domestic production exists and will be limited to those goods expressly included in such list.

It is noteworthy that the legislation does not currently provide for an equivalent incentive with respect to the Contribution on Goods and Services (CBS) or the Tax on Goods and Services (IBS). Although REDATA was enacted following the approval of the Brazilian Tax Reform, the incentives established under the regime remain structured around taxes levied under the current tax system and do not contemplate any specific benefits related to the new consumption taxes.

Furthermore, although the REDATA incentives are generally intended to remain in effect for a five-year period, the legislation expressly provides that the benefits related to PIS/Pasep, Cofins, PIS-Import, Cofins-Import and IPI will remain effective only until December 31, 2026, in accordance with the transitional rules introduced by the Brazilian Tax Reform. In practical terms, the Import Duty (II) suspension is the only benefit that will remain available throughout the regime’s full five-year term.

Finally, despite establishing the principal guidelines of the regime, several aspects remain dependent on further regulation, including: (i) the procedures for enrollment and co-enrollment under REDATA; (ii) the criteria for assessing compliance with the commitments imposed on beneficiaries; (iii) the terms and deadlines for demonstrating fulfillment of such obligations; and (iv) the procedures for exclusion from the regime in the event of non-compliance with the legal requirements or commitments undertaken.

The publication of Law No. 15,504/2026 represents a significant step in Brazil’s strategy to attract investment in digital infrastructure, cloud computing, and artificial intelligence. In this context, potentially eligible companies should begin assessing their projects and investment structures, particularly in light of the enrollment requirements, the commitments imposed by the regime, and the regulations and implementing acts to be issued by the Federal Executive Branch.