Subway bread doesn't qualify for a value-added tax exemption because it doesn't meet the legal definition of "bread," or indeed "food" under the relevant law, Ireland's Supreme Court has decided. The court ruled that all six varieties of bread used in the company's sandwiches are far too sugary to officially qualify as bread, reports Food & Wine. The court found that Subway bread had a sugar content equivalent to 10% of the weight of the flour in the dough, when Ireland’s Value-Added Tax Act states that for a baked good to be exempt from the tax, ingredients like sugar and fat should not exceed 2% of the flour's weight, the Irish Independent reports.
The law aims to ensure that pastries and similar goods are taxed differently from ordinary bread. The ruling was made in a case brought by a Subway franchise owner who sought a VAT refund on the basis that takeout sandwiches qualified as a "staple food." "The argument depends on the acceptance of the prior contention that the Subway heated sandwich contains ‘bread’ as defined, and therefore can be said to be food for the purposes of the Second Schedule rather than confectionary," the court wrote, per the Guardian. "Since that argument has been rejected, this subsidiary argument must fail." Subway's head office hasn't commented on the ruling. (Read more Subway stories.)