Brazil Senate Set to Vote Redata Data Center Tax Bill by September 4
Brazil · TECHNOLOGY
Key Facts
- —Bill PL 278/2026 creates Redata, Brazil’s special tax regime for datacenter services.
- —Vote window Senate concentrated effort runs August 31 to September 4, 2026.
- —Taxes import duty, IPI and PIS/Cofins suspended five years, then exempted.
- —Conditions 10% of capacity for Brazil, renewable power, 2% of equipment value in R&D.
- —Cost Receita Federal estimated US$ 1.01 billion in forgone 2026 revenue.
The Senate’s last concentrated voting week before the October election runs from August 31 to September 4.
Brazil’s Senate has put the Redata data center tax bill on its agenda for the week ending September 4. Senate President Davi Alcolumbre agreed to schedule it after a lunch with President Lula on August 26.
What the September 4 deadline means
Alcolumbre called senators back to Brasília for an in-person concentrated voting week from August 31 to September 4. Rádio Senado reported that call on August 14, before the data center measure was added.
The Redata data center tax bill joined the agenda only after President Luiz Inácio Lula da Silva met the two chamber presidents. Lula said he had convinced Alcolumbre to schedule the vote.
Chamber President Hugo Motta backed the plan, tying it to keeping Brazilian citizens’ data stored inside the country. The Senate file does not yet fix a precise day or hour for the floor vote.
Alcolumbre had kept the measure off his priority list as recently as mid-August. The lunch at the Palácio da Alvorada on August 26 changed that.
From an expired decree to a Senate bill
Redata stands for Regime Especial de Tributação para Serviços de Datacenter, or Special Taxation Regime for Datacenter Services. It began as Medida Provisória 1318 of 2025, signed on September 18, 2025.
A Medida Provisória, or MP, is a presidential decree that takes effect at once. It dies if Congress does not convert it into law within the constitutional deadline.
MP 1318 drew 156 amendments and then lapsed in February 2026 without a Senate vote. The Câmara dos Deputados, Brazil’s lower house, approved a replacement text on February 25, 2026.
That text is Projeto de Lei 278 of 2026, a PL or ordinary bill. Government leader José Guimarães wrote it, and Aguinaldo Ribeiro of Paraíba served as rapporteur.
Which federal taxes the regime suspends
The regime suspends four federal levies on equipment bought or imported for qualifying projects. They are the import duty, IPI, PIS/Cofins and PIS/Cofins on imports.
IPI is the Imposto sobre Produtos Industrializados, a federal excise tax on manufactured goods. PIS and Cofins are federal social contributions charged on company revenue and on imports.
The suspension runs for five years from each purchase or import. It converts into a full exemption once the company proves it met the regime’s conditions.
Law 11.196 of 2005 and Law 15.211 of 2025 are the statutes the bill amends. Congress has used similar suspension-then-exemption designs in earlier Brazilian technology regimes.
What companies must give in return
Beneficiaries must reserve at least 10 percent of processing, storage and data management capacity for the Brazilian market. That floor drops to 8 percent in the North, Northeast and Center-West regions.
They must run on clean or renewable electricity and hold cooling water use at or below 0.05 litres per kilowatt-hour. Annual sustainability reports on energy sources and efficiency are also required.
Companies must invest 2 percent of the value of incentivised equipment in research and development in Brazil. That share falls to 1.6 percent for projects in the three priority regions.
The Chamber’s text steers 40 percent of that research money to the same three regions. Firms must also stay current on federal tax obligations to keep the benefit.
The investment figures on the table
The government has projected that the regime could attract R$ 2 trillion (US$ 387.6 billion) in data center investment. CNN Brasil reported that projection in September 2025, when the decree was signed.
Lula gave a smaller number on August 26, putting expectations near R$ 500 billion (US$ 96.9 billion). Both are expectations rather than signed commitments, and neither has been broken down publicly.
Conversions use the Banco Central do Brasil PTAX selling rate of 5.1604 reais per dollar for August 26, 2026. The rate for August 27 had not been published by the central bank.
The Associação Brasileira de Data Centers puts installed national capacity near 800 megawatts. Industry estimates cited by CNN Brasil see about 3 gigawatts under the regime, against 1.5 gigawatts across Latin America.
What the treasury gives up
The Receita Federal, Brazil’s tax authority, estimated forgone revenue of R$ 5.2 billion (US$ 1.01 billion) for 2026. The annual cost then falls to roughly R$ 1 billion (US$ 193.8 million).
Because the decree lapsed, the Finance Ministry has treated that money as no longer committed. NeoFeed reported on August 19 that the sum could help the government’s primary result.
Passing the Redata data center tax bill in September would revive part of that cost. How much lands in 2026 depends on when the regime is regulated and claimed.
Critics point to water, power and revenue
The Instituto Brasileiro de Defesa do Consumidor, or Idec, opposed the fast-track vote in February. It argued that economic gains would concentrate abroad while environmental and tariff costs stayed in Brazil.
Idec said the text caps water use but sets no clear criteria for electricity consumption. It also faulted the absence of free, prior and informed consultation for Indigenous and traditional communities.
Deputy Chico Alencar of Psol warned during the Chamber debate about water use by large data centers. Idec has asked the Senate for committee debates and public hearings, which the file does not show.
What could still delay the vote
Senators have filed 22 amendments to the Redata data center tax bill since February. One would let natural gas, nuclear power and biomethane count alongside renewable sources.
That amendment, number 22, came from Senator Laércio Oliveira in July. Energy and industry groups back it, yet it cuts against the renewable-only design of the original text.
Any Senate change would send the bill back to the Câmara dos Deputados for a second reading. Eleven parliamentary fronts and 34 trade bodies signed an August 7 manifesto urging quick approval.
The same coalition says building a data center in Brazil costs about 26 percent more than in the United States. It puts the gap against Chile at roughly 35 percent.
Frequently Asked Questions
What is Redata?
Redata is Brazil’s Special Taxation Regime for Datacenter Services, created by Provisional Measure 1318 of 2025. That decree lapsed, so the Redata data center tax rules now sit in Bill 278 of 2026.
When will the Senate vote on it?
The Senate’s concentrated voting week runs from August 31 to September 4, 2026. Senate President Davi Alcolumbre said on August 26 that the bill would be scheduled that week.
Which taxes does the bill cut?
It suspends the import duty, IPI and PIS/Cofins on qualifying equipment for five years. The suspension becomes an exemption once a company meets the energy, water and research conditions.
Connected Coverage
Sources
- www25.senado.leg.br
- www.congressonacional.leg.br
- www.camara.leg.br
- www12.senado.leg.br
- telesintese.com.br
- telesintese.com.br
- neofeed.com.br
- idec.org.br
- teletime.com.br
- eixos.com.br
- www.cnnbrasil.com.br
- olinda.bcb.gov.br
- www.riotimesonline.com
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