The rolls used in Subway’s hot sandwiches contain too much sugar to be considered bread, according to Ireland’s Supreme Court. Ireland’s highest court made the ruling in a case about how the bread is taxed.
An Irish franchisee of the US company had claimed it should not pay VAT on the rolls it uses in heated sandwiches. But the court ruled that because of the high level of sugar in the rolls they cannot be taxed as bread, which is classed as a “staple product” with zero VAT.
Under Ireland’s VAT Act of 1972, ingredients in bread such as sugar and fat should not exceed 2% of the weight of flour in the dough. The court concluded that in Subway sandwiches the sugar content is around 10% of the flour in the dough for both white and wholegrain rolls.
“Subway’s bread is, of course, bread,” said a spokesperson for Subway. “We have been baking fresh bread in our stores for more than three decades and our guests return each day for sandwiches made on bread that smells as good as it tastes.”
Following the ruling, the rolls are subject to tax at 13.5%.