Metro rolls deemed too sweet to be bread in Ireland

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Metro

The buns used in Subway’s hot sandwiches contain too much sugar to be considered bread, according to the Supreme Court of Ireland.

Ireland’s highest court has ruled in a case concerning the taxation of bread.

An Irish franchisee of the American company had claimed that he should not pay VAT on the rolls he uses in heated sandwiches.

However, the court ruled that due to the amount of sugar they contain, they cannot be taxed as a “commodity” at zero VAT.

Under Irish VAT Act 1972 bread ingredients such as sugar and fat must not exceed 2% of the weight of the flour in the dough.

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The five judges, who were considering an appeal from Bookfinders Ltd, a Subway franchisee based near Galway, concluded that in Subway sandwiches the sugar content is around 10% of the flour in the dough for white rolls and complete.

In Irish law, bread is considered a staple food and has a zero VAT rate. Following the judgment, the rolls are subject to a 13.5% tax.

The case arises from a 2006 Irish tax administration decision to reject Bookfinders’ claim for reimbursement of VAT payments made between 2004 and 2005.

After an appeals commissioner upheld the tax administration’s denial of reimbursement, Bookfinders took her case to the High Court, which she lost before going to the Court of Appeal, where she also failed.

Subway has been contacted for comment.

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