The Supreme Court of Ireland just ruled that Subway bread should not be categorized as bred for tax purposes due to its sugar-to-flour ratio.
In a decision surprising to people familiar with Subway’s footlong sandwiches, Ireland’s Supreme Court ruled that the bread they use is not actually bread. At least not in legal terms.
The reasoning behind is that the Subway bread has way too much sugar in it, the court revealed on Tuesday. Ireland’s Value-Added Tax Act of 1972 states that tax-exempt bread cannot have sugar, fat, and bread improver exceed 2% of the flour weight.
In the company recipe, sugar makes up about 10% of the weight of the flour, the findings reveal, which is 5 times what the law sees as acceptable.
The country’s law distinguishes “bread as a staple food” from other baked products that “are, or approach, confectionery or fancy baked goods.” Long story short, the supreme court has found that Subway’s bread might be legally closer to cake than bread.
“The resulting product falls outside the definition of ‘bread’ for the purposes of the Act,” the ruling said. Five judges took the case in to consideration.
Irish Subway franchisee, Bookfinders Ltd., used this interpretation after it tried to get a tax break for some of its menu items.
Ireland permits staple foods, including bread, to have value-added taxes set at 0%. At first, Bookfinders brought forward a claim in 2006, asking for a refund for some of the value-added taxes it had to pay in 2004 and 2005.
Subway stood against the argument that there is an issue with its bread.
“Subway’s bread is, of course, bread. We have been baking fresh bread in our restaurants for more than three decades and our guests return each day for sandwiches made on bread that smells as good as it tastes,” a Subway spokesperson stated. The company says it is looking into the ruling.
The 6-inch Subway bread piece has 3 to 5 grams of sugar, while the gluten-free one has 7, company data states.
But this is not the first time Subway has gotten into trouble over its food.
Back in 2013, the company was sued after a social media post revealed that one of their footlong sandwiches was in fact not really a foot long. Consequently, Subway started measuring its sandwiches, but a case settlement was dismissed as “utterly worthless.”
The year after, Subway removed the chemical azodicarbonamide from its bread (a chemical found in yoga mats), after people started an online petition urging for it to be taken out.
While the company will keep on paying taxes on its bread in Ireland, Apple recently received a big tax cut there. An order for the tech giant to pay back around $15 billion of government tax breaks was overturned this summer.
It is possible that Ireland’s ruling regarding Subway could be put under one category with other debates based on carb issues. For example, whether burritos and hot dogs can be categorized as sandwiches. According to The State of New York, the answer to this is yes, but the U.S. Department of Agriculture holds an opposing view.
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