A Subway franchisee tried to claim their sandwiches were a staple food for tax reasons, but the country’s strict definition of “bread” won’t allow it.
According to the Subway Ireland website, the chain’s six-inch and footlong subs are available on six different kinds of bread, including nine-grain multi-seed, Italian white bread, Italian herbs and cheese, nine-grain wheat, hearty Italian, and honey oat. And, according to the country’s Supreme Court, all six varieties are too sugary to legally be called “bread” at all.
The court case itself is a slightly confusing one unless you’re well versed in Irish tax policies, but it started when a Subway franchise owner challenged the tax authorities’ decision not to issue a refund for value-added tax (VAT) on some takeout foods. Galway-based Bookfinders LTD said that it shouldn’t have to pay VAT on hot coffee and tea, or on the hot sandwiches that weren’t eaten inside the restaurant.
Its argument was that since the sandwiches contain bread, they should be considered a “staple food” and shouldn’t be taxed. But the five Supreme Court judges countered by suggesting that those sandwiches aren’t served on “bread” at all, at least not under the “statutory definition of bread.”
According to the Irish Independent, the judges ruled that Subway’s bread is not a staple food because its sugar content is 10 percent of the weight of the flour in the dough; the Value-Added Tax Act 1972 stipulates that sugar, fat, and “bread improver” cannot add up to more than 2 percent of the weight of the flour. (Those limits are in place to prevent things like pastries and other sweet baked goods from being labeled as “staple foods” and exempt from being taxed.)
Justice Donal O’Donnell dismissed Bookfinders’ appeal on Tuesday, although he did acknowledge that some of the arguments presented on their behalf were “ingenious.” An Appeal Commissioner also said that Subway’s hot sandwiches were not eligible for a zero-percent tax rate, so Bookfinders was doubly denied.
This isn’t the first minor controversy about the content of Subway’s baked goods. In 2014, a petition circulated asking its (U.S.-based) restaurants to remove an ingredient called azodicarbonamide from its breads. Although the FDA has approved the use of azodicarbonamide as a whitening agent for cereal flour and as a dough conditioner, it is also found in yoga mats, shoe soles, and synthetic leather. (It’s worth noting that Australia and the European Union have both discontinued its use in food products.)
“Even though this ingredient is safe, we are removing it from Subway bread. This process began last year and is nearly completed—we have already developed an improved bread formula, conducted extensive performance and consumer testing on it, and pending final government approvals we should complete the entire conversion process within the coming weeks,” Subway said after a petition started making its way around the internet.
Six years later, the bread is ostensibly better—and, for now, we can still call it “bread” in this country.