The appeal by Bookfinders Ltd, based in Tuam, Co Galway, included consideration of whether the bread sold in Subway sandwiches fell outside the statutory definition of bread intended under the Value-Added Tax Act 1972 to attract a zero VAT rate.
The five-judge court ruled the bread in Subway's heated sandwiches falls outside that statutory definition because it has a sugar content of 10pc of the weight of the flour included in the dough.
The act provides the weight of ingredients such as sugar, fat and bread improver shall not exceed 2pc of the weight of flour in the dough.
The clear intention of the detailed definition of "bread" in the act was to distinguish between bread as a "staple" food, which should be 0pc rated, and certain other baked goods made from dough, Mr Justice Donal O'Donnell said.
