An Irish court recently ruled that Subway's bread cannot be classified as bread because it contains too much sugar. Under Irish law, bread can only contain 2% sugar under in its raw form. How much did Subway's bread contain? 10%. What does this mean for businesses that want to open up subsidiaries in other countries? Pay attention to the local laws and make sure that you are compliant with them.
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Transcript:
What’s the difference between sweets and bread? We all may think that we know the answer, sweets are like candy and you eat them when you have a sweet tooth, and bread is something that you eat when you are hungry. But, the Irish courts issued a ruling the other day, giving Subway, an order to pay the full value added tax on their Subway products. They also stripped them of their rights to call their bread used for the sandwiches bread.
Why is this? Under Irish law, bread can only be called bread if it has less than 2% sugar in the raw bread, and Subway uses 10%. Therefore, the stuff used to make Subway’s sandwiches is classified as a sweet, not bread. What does it mean for people who would like to expand their business to other countries? If you have a product that you would like to expand to other markets, check what the local laws are. Discover whether the laws allow you to put this product on the market from a regulatory point of view. Check the laws from a taxation point of view, because tax exemption and tax treatment in one country may not convey to another country.
#289, October 2020, Subway sandwiches, Irish law, bread, sugar, tax law.
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