Brazilian President Luiz Inácio Lula da Silva has sanctioned Law No. 15,504, creating a special tax regime for data-center services known as Redata. Published on September 15, 2026, the measure is designed to support the installation, modernization and expansion of data-center projects in Brazil.

The regime applies to infrastructure serving cloud computing, high-performance computing and the training and inference of artificial-intelligence models. Its central mechanism is tax relief for specified information and communications technology equipment and components used in eligible projects.

What happened

Under Redata, qualifying acquisitions can receive suspensions of tax payments. Those suspensions convert to a zero tax rate when the conditions set out in the law are fulfilled. For imports, the suspension of import tax applies only to listed goods that do not have a domestic equivalent.

The law combines those incentives with requirements intended to connect investment in digital infrastructure with domestic availability, environmental standards and Brazilian innovation activity.

Companies using the regime must reserve at least 10% of their qualifying processing, storage and data-treatment capacity for Brazil’s domestic market. They must also invest 2% of eligible acquisitions in research, development and innovation projects in Brazil that support the digital-economy supply chain.

Why it matters

Data centers are the physical infrastructure behind digital services, including cloud platforms and computing-intensive artificial-intelligence operations. By expressly covering cloud computing, high-performance computing and AI-model training and inference, the law puts those activities within the scope of Brazil’s new incentive framework.

The policy seeks to lower the tax burden on eligible equipment while attaching obligations to the resulting projects. The domestic-capacity rule is intended to ensure that a portion of qualifying infrastructure is made available to the Brazilian market. The research and innovation requirement directs part of eligible spending toward projects in Brazil.

Redata’s effects will depend in part on federal regulations, which are still needed to detail eligibility procedures and some sustainability parameters. The framework may support Brazil’s objective of attracting data-center activity and related digital services, but that outcome is not established by the law alone.

The bigger picture

The legislation places environmental conditions alongside its tax incentives. Beneficiaries must meet sustainability criteria, obtain all electricity from renewable or low-emission generation, and comply with a water-efficiency threshold.

Specifically, projects must achieve Water Usage Effectiveness of no more than 0.05 liters per kilowatt-hour. Water and energy use are significant considerations for data-center development because facilities require substantial computing infrastructure and, in some cases, cooling systems.

By making clean or low-emission electricity and water efficiency statutory conditions, Redata establishes that tax benefits are not available solely on the basis of equipment purchases or construction plans. Companies must satisfy the regime’s operational and sustainability requirements for the incentives to take full effect.

By the numbers

What happens next

Redata is now established in law, but companies considering the regime will need to follow the federal rules that define its detailed application. Those regulations are expected to clarify eligibility procedures and elements of the sustainability requirements.

For international technology, cloud and infrastructure companies, the measure creates a defined Brazilian framework for qualifying data-center investments. Whether it results in a larger concentration of cloud, AI and data-intensive services in the country will depend on implementation and on how prospective projects meet the law’s conditions.