Data Center Companies Push for Approval of Brazil's ReData Tax Regime to Boost AI Investments
Data center companies in Brazil are advocating for the approval of the Special Tax Regime for Data Center Services (ReData) to enhance investments in artificial intelligence (AI). Introduced in September 2023, the measure offers five years of federal tax exemptions on IT equipment imports, contingent on environmental goals and local processing capacity, and requires congressional approval by the end of February to remain valid. Companies like Elea plan significant investments, highlighting Brazil's advantages such as low water consumption for cooling and geopolitical stability to attract AI projects.
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The Special Tax Regime for Data Center Services (ReData) aims to unlock investments in artificial intelligence (AI) in Brazil. Introduced in September 2023, the provisional measure requires congressional approval by the end of February to avoid expiration.
Elea, which operates nine data centers across Brazil, plans to invest R$ 1.5 billion to expand operations, emphasizing that AI projects will accelerate if ReData is approved. The measure offers five years of federal tax exemptions on IT equipment imports, contingent on meeting environmental goals and ensuring 10% of processing capacity serves Brazilian users.
Currently, only 10% to 15% of data generated in Brazil is processed domestically. The director of Elea highlighted Brazil's low water consumption for cooling data centers as an advantage for attracting AI investments, alongside geopolitical stability. There is optimism for ReData's timely approval, with a belief that it will benefit all sectors of the economy.
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