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Customer location vat seems to be really easy to abuse. Luxembourg VPN + Post Forwarding = 15% rate on everything that can be ordered online. Compared to maximum vat in EU (Hungary, 27%) that's an enormous difference.

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One of the key elements of the new rules is that merchants must collect two pieces of non-conflicting evidence. And the onus of proof is on the merchants' shoulders. They must keep searching until they have two pieces of evidence that do not conflict. If IP address, for example, conflicts with cc billing address then more evidence will be required from the customer.

CC billing address is the simplest one to falsify, just use an anonymous prepaid card (they accept all addresses).

Still, not many people will go out of their way to exploit this loophole.

And on top of that, you can be audited by each EU country's tax authority as well... something I have not seen too many people worried about. I think it's an important thing that is being overlooked.

Potential audits will be co-ordinated between EU member states. For example, if an audit of a UK merchant is sought then the relevant EU tax authority (for argument's sake Spain) will have to go through HMRC first. Check out the answer to Q10 here: http://www.taxamo.com/new-eu-vat-rules-q-a/

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