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ABC News reports that the case was brought to court by one of Subway's franchisees, Bookfinders Ltd., which said Subway served food that can be defined as "staple food" and thus should be exempt from value-added tax. The Supreme Court, however, did not agree with the "staple food" definition.
The ruling was handed down on Sept. 29, with the court citing that the bread used at Subway in Ireland used five times the amount of sugar Ireland determined in the VAT Act of 1972. As per the act, the sugar in any bread product must not exceed more than 2 percent of the total weight of flour used in the dough in order to be exempt. Each of the doughs Subway uses, including nine-grain multi-seed and nine-grain wheat, contain around 10 percent sugar content.
"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. Since that argument has been rejected, this subsidiary argument must fail," the official judgement from the court reads.
Bookfinders Ltd. first attempted to get a refund for VAT payments back in 2006, once again claiming it was entitled to the money since Subway is "a staple food."