VAT Treatment of Supplies of Bread

November 1, 2016 Latest News 0 Comment

The supply of bread may be liable to VAT at the Zero rate, Reduced rate or the Second Reduced rate depending on the particular bread product concerned and the circumstance in which it is supplied.

Recently the High Court upheld a decision of the Revenue Commissioners to disqualify the bread served in Subway from a Vat exemption.

Under the Taxes Consolidation Act 1997, a zero rate of Vat applies to the supply of bread with less than 2 per cent fat, sugar and bread improver.

The wholesale and retail supply of bread products (such as sliced pans, batch bread, bread rolls, vienna rolls, wholemeal bread, wholegrain bread, multigrain bread, baps, blaas, bagels, naan bread and pita bread) is liable to VAT at the Zero rate only where the particular bread product supplied conforms with the definition of bread as set out in the VATCA. Otherwise the Reduced rate of VAT applies.

Supplies of bread products that do not conform to the definition of bread are liable to VAT at the Reduced rate. Such bread products may have levels of permitted ingredients (sugar, fat, dried fruit, vegetables, herbs or spices) that exceed the weight limits specified in the definition or may contain other ingredients that are not listed in the definition.

Examples of some of the bread products liable at the Reduced rate include croissants, cheese- breads, cheese bagels and brioche. Crispbread products are also liable to VAT at the Reduced rate.

The supply of any bread in the course of catering or by vending machines is liable to VAT at the Second Reduced rate of VAT.


For related enquiries, further clarification and assistance with Tax matters contact Joe Cunnane at TRA Professional Services

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