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    Subway sandwiches do not meet legal definition of being BREAD, Ireland’s Supreme Court rules 

    Subway sandwiches are too sugary to meet the legal definition of being BREAD, Ireland’s Supreme Court rules

    • The sandwiches could not be categorised as a staple food, Supreme Court ruled
    • Due to their high sugar content, which stands at 10pc of weight of flour in dough
    • Ruling ends a 14-year battle by the global takeaway chain to have its rolls recognized as a tax-free staple 

    Ireland’s Supreme Court has ruled that Subway sandwiches are too sugary to be classed as ‘bread’ and therefore are not liable for tax exemption. 

    The court ruled on Tuesday that the sandwiches could not be categorised as a staple food, which would come with a zero VAT rate, rejecting a Subway franchise’s arguments that it was not liable for tax on some of its takeaway products. 

    The appeal by Bookfinders Ltd, based in Tuam, Co Galway, follows on from a 2006 decision by Revenue refusing the takeaway outlet a refund for VAT payments made between early 2004 and late 2005. 

    Ireland’s Supreme Court has ruled that Subway sandwiches are too sugary to be classed as ‘bread’ and therefore are not liable for tax exemption (Stock image) 

    The ruling therefore ends a 14-year battle by the global takeaway chain to have its rolls recognized as a tax-free staple.

    The five-judge court determined that the bread in Subway’s heated sandwiches falls outside that statutory definition due to its high sugar content, which stands at 10pc of the weight of the flour included in the dough.

    The Vat Act 1972 states that the weight of ingredients in bread such as sugar, fat and bread improver shall not exceed 2 per cent of the weight of flour in the dough.

    The court ruled on Tuesday that the sandwiches could not be categorised as a staple food, which would come with a zero VAT rate

    The court ruled on Tuesday that the sandwiches could not be categorised as a staple food, which would come with a zero VAT rate

    The Act aimed to distinguish between bread, which is considered a staple food and is taxed at zero per cent, and other baked goods made from dough, which are taxed. 

    Bookfinders claimed that it was owed a refund after the sandwiches were taxed at 9.2 per cent when, it argued, the rate should have been zero. 

    The company lost an appeal at the High Court and the Court of Appeal before the Supreme Court agreed to hear a further appeal.

     Mr Justice O’Donnell dismissed the appeal in a judgment on Tuesday, while also admitting that the Bookfinders arguments were ‘ingenious’. 

    He agreed with the appeal commissioner that hot drinks, including tea and coffee, and sandwiches fell under the sixth schedule of the 1972 Act and were thus taxable at 13.5 per cent.

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