Brazil's Senate passed PLP 74/2026 on the evening of 3 September, the complementary bill that exempts certain tax benefits and mandatory spending from fiscal restrictions in 2026. Among the areas it covers are free-trade zones, capital goods and data centres. It now goes to presidential sanction.
Why a second bill was needed
This is the correction to a story that ran worldwide on 1 and 2 September as Brazil approving billions in tax breaks to attract AI data centres. The special regime for data-centre services was approved by the Senate on 1 September — but Brazil's fiscal rules bar new tax benefits without offsetting measures, so it could not legally take effect in 2026. PLP 74 is the carve-out that makes it usable. The regime had earlier been stripped out of that bill by its rapporteur before the government had it restored.
What the regime actually waives
It suspends federal Import Tax, IPI and PIS/Cofins on equipment for installing, expanding or modernising data centres. The government's own estimate puts the cost at R$5.2bn of foregone federal revenue in 2026, then roughly R$1bn a year for the two following years. That is a revenue waiver, not a measure of investment attracted — a distinction the headline number invites readers to miss.
The conditions are the story for operators
Qualifying data centres must draw power from renewable sources, hold annual cooling water-use intensity to no more than 0.05 litres per kWh, invest in Brazil an amount equal to 2% of the value of goods bought under the regime, and reserve 10% of data-centre services for the domestic market. The water ceiling is strict enough to push operators toward closed-loop or air cooling.
What the received framing gets wrong
Neither bill is law. Both await presidential sanction, and the state-level ICMS tax — the larger cost line for a Brazilian data centre — is untouched by either. On the vote itself, the chamber's own record says only that passage was unanimous; the tallies circulating, 66 in favour in the Senate and 346 in the Chamber earlier that day, come from trade and general press rather than a certified count, and are worth treating as press-reported.