Pernambuco and Rio Grande do Norte Introduce Incentives for Data Centers
Pernambuco and Rio Grande do Norte are set to introduce significant tax incentives for data centers starting January 1, 2026, as part of Brazil's federal ReData program. The initiative includes tax exemptions on technology imports for qualifying projects, with conditions for domestic capacity allocation and renewable energy usage. While aimed at enhancing digital infrastructure, the program raises concerns regarding its fiscal impact and potential for job creation.
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From January 1, 2026, Brazil's federal ReData tax incentives will enhance state benefits for data centers, with Pernambuco and Rio Grande do Norte offering significant tax reductions. The ReData program will exempt certain taxes on technology imports for qualifying projects, with companies required to allocate 10% of capacity to the domestic market and utilize renewable energy.
Companies must also invest 2% of equipment costs in research and innovation. The incentives are set to remain effective until 2026, subject to legislative approval by February 25, 2026. The initiative aims to boost digital infrastructure while raising concerns about fiscal impact and job creation.
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