Brazil’s Chamber of Deputies has approved a bill creating the Special Tax Regime for Data Centre Services (Redata) to attract investment in digital infrastructure.

As a result, the plan would grant approximately R$7 billion in tax exemptions over a three-year period.

The scheme would reduce costs for companies by suspending federal taxes on the purchase and import of equipment used to build or expand data centres, according to reports.

To qualify, companies must serve the local market, use only renewable energy, meet water-efficiency rules, and invest in research and innovation.

However, part of this investment must go to Brazil’s North, Northeast and Central-West regions.

The proposal now goes to the Federal Senate, which must vote before the current provisional measure expires at midnight.

Recently, Capacity spoke with Elea Data Centers VP of international business, Elena Winters, where she revealed that these tax reforms could change the market significantly.

Prior to today’s announcement, she said: “Redata, if passed, reduces taxes and makes investment in Brazil more attractive. Without it, development will continue, but at a slower pace.”

“Growth continues, but Redata would ease entry and unlock billions of dollars in investment.”