A Subway franchisee in Ireland lost a taxation case after the Supreme Court ruled that the sandwich bread had too much sugar to meet the legal definition of bread, according to the Irish Independent.
Bread, which is considered a “staple” food under the country’s laws, has a zero value-added tax.
Unfortunately for the franchisee, Bookfinders Ltd., the amount of sugar in Subway bread exceeds the maximum amount allowed to avoid the VAT.
The Value-Added Tax Act of 1972 states that sugar and fat should not exceed 2 percent of the total weight of the flour in the dough, according to the Independent, but the paper reports that the sugar used to make Subway bread is 10 percent of the weight of the flour.
“The High Court judge affirmed the findings of the Appeal Commissioner that the bread used by the appellant falls outside of the definition of “bread” in the Act due to the sugar content,” the court wrote after its decision.”
Bookfinders was appealing a 2006 decision in which the court rejected claims that the franchisee should be refunded the 9.2% VAT it had been paying.