[milesrout]

VAT is a consumption tax. If you consume goods in a place with lower consumption taxes then the tax is doing exactly what it is meant to do.

If you buy consumer goods in a low-VAT place but transport them to a high-VAT place and consume them, then that is clearly illegitimate for the same reason that it is legitimate for VAT to be applied to imports and refunded to exporters.

[arghwhat]

Within EU, you have free movement of goods, and the VAT is generally paid in the country of sale, not in the country of of the consumer. There are a few exceptions to this, and other regions might have other trade agreements.

Within the EU definition, VAT taxes the company making the sale for the increase in value of a product through the processes the companies and distributors applied to it, and is not a taxation of the receipt of said value.

There is nothing illegitimate about then consuming the product in a different country. It just doesn't happen to send money to your own country's treasury.