The Supreme Federal Court (STF) decided that the cards game TCG Pokémon is exempt from taxes in Brazil, denying a request by the Attorney General of the Union (AGU) of the president's government Jair Bolsonaro (no party) made in April 2020.

The decision was taken by Minister Carmen Lúcia, who accepted the argument that the cards they stimulate reading and, therefore, can be classified in the category of books – thus, being tax free. Currently, a basic pack with 20 cards costs R$15,00.

Special TCG Pokémon Charizard. Image: Press Release/The Pokémon Company International
Bolsonaro government is prohibited by the STF from taxing Pokémon cards. Image: Press Release/The Pokémon Company International

The tax benefit of which Pokémon cards fall is provided for in the article 150 of federal Constitution, which provides tax exemption in order to reduce the final price of books, newspapers and sticker albums. The law was created precisely to reduce the price of items that can encourage the population's access to culture, information and education.

And despite the card not being exactly a book or a figurine, the STF understood that the items can encourage children to read and become familiar with print media. "Using, in the final analysis, the purpose of the tax benefit", the minister nodded in the decision.

The decision was taken in April of last year and is still valid, and may pave the way for other card games are tax-free as books in the country. IRS recently published a document on the first part of the government's tax reform proposal, which stated that textbooks could be taxed.

If the reform continues, the federal government will be able to tax the Pokémon cards. However, Economy Minister Paulo Guedes guarantees that the idea is out of the question. "I never wanted to tax books," he said in a recent newspaper interview Folha de S. Paul.

Federal Government X Pokémon Cards: A Fight Without Badges

Editing done on social networks transforms Carmen Lúcia into a "Pokémon master"; STF minister prohibited Bolsonaro government from taxing card games. Image: Assembly/Brazil Agency/Disclosure
Editing done on social networks transforms Carmen Lúcia into a “master Pokémon”; STF minister prohibited Bolsonaro government from taxing card games. Image: Assembly/Brazil Agency/Disclosure

The dispute involving the cards of the “pocket monsters” and the Tax Legislation in Brazil is not recent and started more than a decade ago, in 2009. At the time, the Center of Industry of the State of Amazonas (Cieam) and the Attorney General of the National Treasury ( PGFN), an agency linked to the AGU, questioned in court the tax benefit on the sale of Pokémon TCG granted to Devir Livraria, responsible for distributing the card game.

The company framed the game as an “educational object” and, therefore, had the exemption of books and newspapers. The issue lasted for years, but the Federal Regional Court of the 3rd Region (TRF3) won the case for the “Pokémon side” and denied the application of taxes to more requests by federal entities.

In 2020, the discussion went to the STF. The PGFN filed an Extraordinary Appeal with a Grievance (ARE), asking the highest court in the country to suspend the TRF3 decision and allow the application of taxes "until the matter is decided" once and for all. The case (read the official document here), then stopped at the table of Minister Carmen Lúcia.

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The Bolsonaro government argued that the TRF's analysis of equating Pokémon with books or a sticker album for tax exemption “was superficial”, as the cards they were part of a strategy game and, most obviously, they weren't sticky to be understood as stickers. "The immunity rule provided for in the constitutional text aims to encourage the advancement of culture, democracy, education, access to information and a Pokémon game certainly does not serve this purpose," he argued.

The PGFN also pointed out that the cards they did not encourage reading, but only complemented “a game of conquest” and exchanges, an element taxed by the Federal Revenue in the classification of “playing cards”. The STF did not accept the arguments and stated that Pokémon TCG has "interactive content and characters taken from manga“, described by the defense as “picture books”.

Minister Carmén Lúcia, then, accepted that Pokémon TCG stimulates the search for knowledge and defined the card game as "a vehicle for transmitting printed information to children", fitting it into the concept of "books and periodicals" of the rule immunizing tax.

And more: the STF also ordered the federal government to pay 10% of the defense attorney's fees. Currently, the case has returned to TRF3, where it can still be reviewed – something that, after a “super effective blow”, should not happen.

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