The data center industry in Brazil faces different regulatory and legal battles at the same time.
Although the federal lower house has approved the urgency of Bill 278/26, which creates ReData (Special Tax Regime for Data Center Services), replacing Provisional Measure 1.318/25, the uncertainty caused by a parallel tariff increase on equipment has created a rift in the industry.
At the same time, the federal government raised import tariffs on technology equipment through a resolution of the Foreign Trade Chamber (Camex), linked to the Ministry of Development, Industry and Trade (MDIC) – the same ministry that promoted ReData.
Entities such as Brasscom and the Brazilian Data Center Association (ABDC) have been stating that the Camex increase “nullifies” the benefits of ReData and do not rule out taking the issue to court.
Executives in the sector also question the measure.
“It makes no sense. It is contradictory, in fact. You can have one strategy or the other, but having both makes no sense at all. We need to be clear about the government’s position in defending sovereign AI and the country’s digital transformation,” said Alessandro Lombardi, CEO of Elea Data Centers, to BNamericas.
An executive from the industry, who preferred not to be identified, stated that there are “intense” talks underway with the MDIC and Camex, with the possibility of reversing, or at least suspending and postponing, the tax increase.
Domestic manufacturing
Another battleground involves the scope of the products and equipment that will be included in ReData, if the project is approved.
The Brazilian Electrical and Electronics Industry Association (Abinee) again defended limitations on ReData after the project advanced in Congress under an urgent procedure, citing damage to the local industry.
“Abinee has argued that the initiative should expand local content, strengthen local suppliers, and consolidate advanced engineering and manufacturing in the country, especially in a context of growing global demand for computing capacity and artificial intelligence,” the association says in a statement, adding that it is in favor of the program.
For Abinee, equipment produced in Brazil for data centers is recognized for its high technology and for being manufactured by international brands. According to the association, the technology used by the companies established in the country is the same as that available in the main global markets.
Equipment such as servers, storages and switches are already manufactured domestically, says Abinee.
“Companies have full capacity and readiness to meet both local and export demand, provided level‑playing‑field conditions are implemented,” said Abinee’s CEO, Humberto Barbato.
According to him, the government understands this opportunity and is aligning ReData with other policies, such as Nova Indústria Brasil (NIB), the ICT Law and Padis.
Abinee supports the tax increase promoted by Camex, taking the opposite side of Brasscom, ABDC, Abes, and other technology and data center entities.
For Abinee, the resolution aims to stimulate production installed in the country, “a factor considered positive in view of the opportunities generated by policies focused on data centers and artificial intelligence”.
For products that do not have equivalent domestic production, the entity states that there is the possibility of using the ex-tarifário, a regime that allows the temporary reduction of the import tax rate on capital goods, information technology, and telecommunications.
“We do not want to block and close our borders, on the contrary, but we must avoid what we call digital extractivism. A policy of this magnitude must be used as a leveraging instrument for its industry, aiming at productive development and technological sovereignty,” Barbato concludes.
A data center executive, speaking on condition of anonymity, spoke of a “fight” with Abinee to “secure the right ReData”.
Negotiations in the states
At the same time, data center companies and associated entities have stepped up negotiations with states to obtain incentives and tax breaks, mainly in the state tax ICMS, in order to offset the increase in federal import tax rates on capital goods (BK) and information technology (BIT).
This movement was already underway, since ReData deals only with federal taxes, but it accelerated after the increase introduced by Camex.
Eduardo Carvalhaes, partner in the public law and regulation practice at Lefosse Advogados, said that this is one of the main topics brought by executives to the firm when discussing data center investment projects in the country.
“We have been receiving from our clients demands related to a lack of clear predictability about how negotiations will take place, from tax benefits, especially with state and municipal governments, to the licensing perspective,” Carvalhaes told BNamericas.
“There is a lack of clarity about what the environmental requirements and exceptions will be, which can often lead to operational limitations.”
Speed in review
While they push for the “right” ReData at the federal level, seek state benefits, and try to reverse Camex’s tax increase, companies in the sector also face criticism from civil society regarding the pace of discussion of sectoral policies.
Idec (Brazilian Institute for Consumer Protection) and the Coalition for Rights on the Network, among other organizations, expressed concern about the urgent processing of Bill 278/2026.
They state that the high consumption of energy and water by data centers can overload local infrastructure, affect the rates paid by consumers, and create environmental risks – aspects that, according to them, are not being properly considered.
They also question the exemption from federal taxes (PIS, Cofins, IPI and import tax) in a “highly concentrated” sector, arguing that the economic benefits would tend to be concentrated outside the country, while the environmental and tariff costs would remain in Brazil.
For these institutions, there is a lack of participation by civil society and environmental agencies in the drafting of the National Data Center Policy that underpins ReData.
“Under the argument of avoiding the expiration of Provisional Measure No. 1312/2025, the adoption of the urgency regime reduces the time for parliamentary analysis and makes it more difficult for civil society to participate,” Idec said in a statement.
“Evidence points to a process that prioritizes the accelerated granting of tax incentives to large data center companies, without proper assessment of the social, environmental, territorial, and tariff effects associated with the expansion of these infrastructures. This is a practice in total disagreement with the public interest and with the principles that guide the protection of consumers.”
(The original version of this content was written in Portuguese)
