Brazil's Strategic Tax Breaks to Boost Data Infrastructure

Brazil's Chamber of Deputies has passed a bill to create tax incentives for data centers, aiming to attract major digital investments. Key conditions include renewable energy use and regional development contributions. The bill now awaits Senate approval before its supporting measure expires.

In a decisive move to lure international digital infrastructure investments, Brazil's Chamber of Deputies has passed legislation establishing the Special Tax Regime for Data Centre Services, known as Redata.

This initiative is designed to waive approximately R$ 7 billion in taxes over three years, targeting the expansion and installation of data centers in Brazil. The proposal is on its way to the Federal Senate, where it must be approved before the provisional measure that supports it expires at midnight.

The framework offers substantial tax exemptions for ICT equipment, markedly reducing the costs associated with establishing data centers. Companies aiming to benefit from these exemptions are required to meet several conditions, including using renewable energy and contributing to regional development, aligning with Brazil's vision for sustainability and digital prowess.

(With inputs from agencies.)