Re: This is entirely UNreasonable
VAT is a "Value Added Tax", and the whole idea of is is that at each stage in a production process where value is added, it is taxed.
If a manufacturer buys paper from a factory, he pays VAT because that factory is assumed to have added value to turn wood pulp & water into paper. When he turns that paper into pretty bags he adds value, and his purchaser then pays VAT on the additional cost for adding that value. OK, so the current scheme is implemented through a serious of pay-and-claim-back-when-you-sell steps, but the principle still applies. The added value is taxed.
So, logically, why is the VAT not payable in the place where the value was added? If that manufacturer is in the UK, and the purchaser is in France, the value was still added in the UK. It doesn't make logical sense for the final purchaser to pay the tax in the state where they live, since by definition that final purchaser is adding no value. If that French purchaser walks into the manufacturer's shop in London, buys the product, and takes it home to France, he won't be expected to claim back the VAT at Dover & pay French VAT when he gets home. Why should it be different if he is making the purchase by proxy?
The cynic in me can't help but wonder if this is an EU backdoor to ensure that wealthy countries still get tax income even as their manufacturing industry is exported to cheaper places. If a German goes online and buys a cheap TV that is made in, and shipped from, say, Romania instead of one made in Hamburg, the German treasury will still get the tax.