Brazil: Provisional Measure No. 1,318 establishing Special Taxation Regime for Datacentre Services (REDATA) entered into force

On 18 September 2025, Presidential Provisional Measure No. 1,318 entered into force following its publication in the Official Gazette of the Union. The measure amends the Law No. 11,196 of 21 November 2005 and Law No. 15,211 of 17 September 2025 to establish the Special Taxation Regime for Datacentre Services (REDATA), alongside the Special Taxation Regime for the Information Technology Services Export Platform (REPES) and the Special Regime for the Acquisition of Capital Goods for Exporting Companies (RECAP). It sets the legal framework for qualification and co-qualification under REDATA, overseen by the Special Secretariat of the Federal Revenue of Brazil (RFB) of the Ministry of Finance, and introduces requirements on domestic market capacity, renewable energy supply, water efficiency standards, and research and development contributions to the digital economy production chain. The measure provides for the suspension and subsequent conversion to zero rate of federal taxes under defined conditions, establishes monitoring by the Ministry of Development, Industry, Commerce and Services (MDIC) and the Ministry of Finance, and determines that the validity of REDATA’s incentives will be five years in accordance with Law No. 15,080 of 30 December 2024, with federal tax benefits expiring on 31 December 2026 pursuant to Constitutional Amendment No. 132 of 20 December 2023 and Complementary Law No. 214 of 16 January 2025. In addition, it inserts Article 36-A into Law No. 15,211 to allocate fine revenues for five years to the National Fund for Children and Adolescents (FNCA).