VAT is notorious for its capacity to generate distinctions at odds with common sense – when is a crisp not a crisp, when is a biscuit a cake and so on. Recently we were called to examine what constitutes bread.

The latest from the kitchens in Dublin Castle is Revenue eBrief 70/11. This advises us that “The supply of bakery products such as cakes, biscuits, bagels and croissants, being flour or egg based bakery products, is liable to VAT at the reduced rate of 13.5% in accordance with paragraph 3(5) of Schedule 3 of the Value-Added Tax Consolidation Act (VATCA) 2010, as amended.” Fair enough. And it goes on:

• “The supply of bread that meets the ingredient definition in paragraph 8(1) of Schedule 2 of the VATCA 2010 is liable to VAT at the Zero rate. The ingredient definition of bread is very specific and although products, such as garlic bread, onion bread and fennel bread are marketed as bread, these products do not generally conform to the ingredient definition of bread in the VATCA 2010 and do not therefore qualify for the Zero rate of VAT.”

Generally speaking, the Taxes Acts are not known for their recipes. Schedule 2 of the VATCA 2010 may be the closest we get.