Re: This is entirely UNreasonable
"This is important in the recent Amazon 1p case: the contract of sale is not formed until the customer has paid, AND the goods have been delivered to the customer. "
That may be the case in the UK, but this whole thing is about the differences in the rules between the different EU members. For example in Spain, the VAT is immediately payable as soon as the invoice is issued. There is no requirement for you to be paid, or for the contract to be upheld. Under a new law, you may be able to convince the tax office to rebate the VAT on something that doesn't end up being paid (although you'll have to wait until the end of the year for your refund, if any).
"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."
NO - VAT is a consumption tax. It is paid when something is consumed. Intermediaries in the chain do not charge/pay VAT (and if they do, they claim it back). The idea is that the VAT is charged at the price that the consumer pays, which is normally the higest price in the chain. In your example, the printers buy their ink/paper VAT free, and only if it is sold to a consumer is VAT charged (although in the UK they could claim it is a book, and hence attracts VAT at 0%)