Agree, the recent change to charge VAT depending on the location of the buyer is pure hell to deal with. As a EU business, I really don't want to have to figure out where in the EU my customers are, and adjust the price according to whatever their country's VAT rates are this month.
It is somewhat necessary, to solve the problem of Amazon, Google, Apple and others selling everything via low-VAT countries like Luxembourg.
But there would have been ways to make it much less painful to manage for small online businesses. For example a revenue limit (like 1M EUR) on cross-border sales before you have to start dealing with each country, or just an unified EU-wide VAT rate.
VAT is just one source, but at 15-20% of government revenue, it is an important source. Most of it will be generated by business that physically happens in the country, and is unambiguously taxed there, but more and more of business is moving online.
Selling from low-VAT countries is a problem because it is a fictional accounting move. If you buy a product from Amazon.co.uk, delivered from an UK warehouse to an UK address - or from Amazon.de, delivered from a German warehouse to a German address - then it is still billed through Luxembourg. Even though by all non-accounting measures it is business happening inside the UK and Germany. The only reason for choosing Luxembourg is tax rate optimisation, not because there's an actual place of business there.
It's understandable that most countries in the EU would want to keep taxes on business that happens in their country to themselves. If VAT exists at all, then it makes sense not to gift it to Luxembourg. So the rules were changed to remove this accounting trick.
