Brazilian government extends Export Processing Zone tax regime to service providers

On July 21, 2025, Brazil’s President issued Provisional Measure (PM) No. 1,307/2025 to introduce significant changes to the rules for Brazilian Export Processing Zones (ZPEs) established via Law No. 11,508/2007. The main innovation concerns service projects, and consists of extending ZPE benefits to service providers who offer ‘export-related services’ to service exporters already eligible for the regime.

As geographically defined free-trade areas focused on foreign markets, ZPEs are subject to a special tax regime that incentivizes companies established to manufacture goods for export, provide services related to industrial activities or deliver services exclusively to foreign markets. Their main objectives include promoting an export-oriented culture, reducing disparity between different regions of Brazil, fostering the spread of technology, and driving the country’s economic and social development.

The tax benefits granted under the ZPE regime include exemption from federal taxes on acquisitions or imports of machinery, equipment, tools, and instruments intended to be incorporated into the fixed assets of companies authorized to operate in ZPEs, as well as exemption from PIS and COFINS taxes on imports or acquisitions of services.

Service providers now eligible for the regime

PM No. 1,307/2025 amends Section 21-A of Law No. 11,508/2007, which previously restricted tax benefits to service providers involved in directly manufacturing goods for export. With the new wording, a similar rationale now applies to service exports: companies providing ‘export-related services’ to service exporters may now establish operations in ZPEs and benefit from the related tax incentives.

For example, this change enables data centers to be included among the eligible beneficiaries. In such cases, the service provider must demonstrate a contractual link with the exporter (such as hyperscalers), and the relevant project must be approved by the National Council of Export Processing Zones (CZPE). The duration of the tax benefits is limited to the term of the contract with the exporter, with the possibility of submitting the contract up to 12 months after project approval.

If the contractual link with the exporter is terminated, the company will no longer qualify for the ZPE tax benefits. In such cases, the exporting company must notify the CZPE of the contract termination within 30 days.

Despite this progress, uncertainties remain regarding which services may qualify as ‘export-related services’. Paragraph 2 of Section 21-A provides an illustrative list, while paragraph 3 grants the CZPE authority to determine which services are eligible based on the Brazilian Services Classification (NBS).

It remains unclear, for instance, whether qualifying services must fall within the 70 NBS codes listed in CZPE/MDIC Resolution No. 95/2025, or whether others may be added. As per the new wording, the project approval documents must specify the eligible establishment and list the services to be provided, according to their NBS classification.

Mandatory use of renewable energy

Another significant change PM No. 1,307/2025 introduces is the requirement that all electric power consumed by companies operating in ZPEs must come from renewable energy plants that were not in operation at the moment PM No. 1,307/2025 was published.

Notably, PM No. 1,307/2025 does not define what constitutes a renewable source, which could lead to uncertainty and discourage investment in electricity generation, though future regulations are expected to clarify this issue. In line with industry practices, renewable sources include not only wind and solar plants but also hydropower and biomass-fired thermal plants.

This requirement, however, does not apply in the following cases:

• Indirect service providers (as defined in Section 21-B of Law No. 11,508/2007), who, although located in ZPEs, are not eligible for the special tax regime;
• Regulated consumers;
• Energy power generated for self-consumption from plants located within the respective ZPE; and
• Projects approved by the CZPE before the publication date of PM No. 1,307/2025.

For more information on this topic, please contact Mattos Filho’s Tax and Digital Infrastructure practice areas.