Property Rights in Suspension
John Locke argued that property arises from labor—that what a man produces with his own hands belongs to him by natural right, not by the grace of a sovereign. Three centuries later, the Polish tax system tests this proposition every day.
The VAT you have overpaid is your property. It is not a gift from the state. It is not a favor from the tax authority. It is money you paid beyond what you owed—and which the state is obligated to return.
And yet two billion złotys sit in the accounts of the Ministry of Finance, awaiting refund. The record holder waited ten years. Two hundred thousand companies—every entrepreneur who settles VAT—may find themselves in this situation.
Claude Frédéric Bastiat wrote that the state is the great fiction by which everyone endeavors to live at the expense of everyone else. In the case of withheld VAT refunds, the fiction becomes reality: the state lives at the expense of the entrepreneur, holding his money for years without paying market price for the privilege.
Sixty Days That Last for Years
The law speaks clearly: VAT refund within sixty days. Under certain conditions—forty, twenty-five, even fifteen.
Practice speaks otherwise.
On the fifty-ninth day, a notice arrives extending the deadline. The office needs more time. It must verify. It must check counterparties. It must ensure there are no irregularities.
Then another extension. And another. And another.
Milton Friedman used to say that nothing is so permanent as a temporary government program. The same applies to temporary extensions of VAT refund deadlines. They begin with a month; they end after years.
During this time, your money is working—but not for you. It works for the state budget. It is an interest-free loan you never agreed to make.
Verification as Euphemism
The word “verification” sounds neutral. It suggests checking, confirming, making sure. In reality, it means something else: suspicion.
When the office “verifies” your refund, it adopts a working hypothesis that something is wrong. That perhaps you are participating in a carousel. That perhaps your counterparty is unreliable. That perhaps your invoice does not document an actual transaction.
This hypothesis requires no evidence—possibility suffices. And possibility exists always, in every industry, with every transaction.
Since 2016, intensified inspections have targeted companies in transport, logistics, construction, fuel, electronics, automotive, and financial services. This is not a narrow list of suspect sectors. This is a significant portion of the Polish economy.
If you operate in any of these industries and apply for a VAT refund, you can expect one thing: that sixty days is only the beginning.
The Economics of Administrative Violence
Hayek warned of “the road to serfdom”—of how small state interventions accumulate into a system of control that destroys economic freedom. The withholding of VAT refunds is such an intervention.
On paper, it is merely a verification procedure. In reality, it is an instrument capable of destroying a company.
The entrepreneur whose refund of one million złotys is withheld has one million złotys less in the till. He must borrow to pay suppliers. He must take credit to meet payroll. He must pay interest to the bank instead of receiving interest from the state.
And when finally—after months or years—he receives the refund, the statutory interest will not cover his losses. It will not compensate for lost contracts. It will not repair relationships with counterparties who lost trust in a company that does not pay on time. It will not restore health damaged by stress.
Economists call this “opportunity cost”—the value of what you could have done with the money had you possessed it. The tax system ignores this cost entirely.
Justice Inverted
Thomas Jefferson wrote that the government is best which governs least. The Polish VAT refund system is its antithesis: it governs maximally, intervenes deeply, and places responsibility for that intervention on the citizen.
In normal legal order, the state must prove you have an obligation. In the VAT refund system, you must prove you have a right to your own money.
This inversion carries profound psychological consequences. The entrepreneur who applies for a refund does not feel like a creditor pursuing a debt. He feels like a supplicant begging for a favor. Every document he submits is evidence of his own innocence. Every answer to the office’s questions is a defense against an unspoken accusation.
The system has taught entrepreneurs that their own money is a privilege, not a right. This is the victory of power over property—a victory that Locke would have called tyranny.
The Invisible Costs
There are costs of withheld refunds that can be seen: lost liquidity, interest on loans, delayed payments.
There are costs that cannot be seen.
The entrepreneur who has once endured months of verification changes his behavior. He stops investing—because he does not know whether he will have the funds. He stops taking risks—because the system punishes those who stand out. He begins to think like a bureaucrat—what is safe, what is standard, what will not attract attention.
Frédéric Bastiat described “that which is not seen” as the true cost of state intervention—businesses not founded, innovations not introduced, jobs not created. Withheld VAT refunds generate such costs every day.
Two billion złotys frozen in the system is not merely two billion in missing liquidity. It is thousands of business decisions not taken, because entrepreneurs could not rely on their own money.
European Law as Shield
There is a weapon the Polish tax authority would prefer you did not know about: European law.
The principle of VAT neutrality—fundamental to the entire system—means that the tax should not burden the entrepreneur. The Court of Justice of the European Union has repeated this for years. The right to deduction and refund is a structural element of the tax, not a privilege.
The CJEU has also ruled that denial of a refund requires proof of the taxpayer’s bad faith. That the burden of proof rests on the authority. That an honest entrepreneur cannot be punished for fraud committed elsewhere in the supply chain.
These rulings exist. They can be invoked. They can be used to fight.
The problem is that fighting requires time and resources—which an entrepreneur with a frozen refund usually lacks. The system knows that most will surrender. That they will accept the extensions. That they will not go to court.
It counts on your capitulation.
What We Can Do for You
We analyze decisions extending VAT refund deadlines—because many of them are formally defective, issued without basis, susceptible to challenge.
We appeal these decisions—to higher-instance authorities, to administrative courts, all the way to the Supreme Administrative Court.
We represent entrepreneurs in verification procedures—tax inspections, proceedings, interrogations. We ensure that verification does not turn into an investigation without foundation.
We invoke CJEU case law—because European law is on the taxpayer’s side, even when Polish practice pretends it does not exist.
We fight to recover money that is yours—and that the state is unlawfully withholding.
A Final Word
The VAT you overpaid is not a gift you are requesting. It is your property, which the state is obligated to return.
The system is constructed so that you forget this. So that you treat a refund as a favor. So that you accept months and years of waiting as normal. So that you do not ask why your money is working for the budget instead of for you.
Locke, Bastiat, Hayek, Friedman—all warned against a government that treats the property of citizens as its own. The VAT refund system is the embodiment of that warning.
But the law is still on your side. You need only reach for it.
We help you reach.
