I think that only works if you have limited business, but I'm not sure. I believe the problem is that we're in a country with 25% VAT, but if we want to charge our German customer only 19%, we need to do that via a German company, otherwise we would have to charge them the 25%, leaving us uncompetitive (6% is more than our entire profit for some products).
If you mean VATMOSS then you don't have to be running a Limited Company - individual sellers as of January 2015 have to now account for the tax due in the country of the buyer. This apparently applies to sellers from outside the EU too, if you're selling certain classes of goods (non-personalised intangibles) over the internet to the EU then you're supposed to retain [3 pieces of!] evidence of the locality of the purchaser and deal with that country's tax office to pay the required tax.
The "MOSS" [Mini One-Stop Shop] bit is a system that individual countries in the EU use to send the payments to the countries where the tax is due.
The method you mention works for tangibles or personalised goods. With VATMOSS there is no exemption for SMEs or low-revenue situations or anything.
I haven't done it but isn't the thing with the new VAT regulations that you can pay your taxes to one revenue service (and just register with one) and they will divide it according to your sales data (e.g. the customers country)?
Or do you mean that you have to pay VAT at all if you do this? In this case your problem is more political and about the concept of VAT in general. I mean almost any EU country had it for a long time. It sucks that there are huge differences when it comes to the exact amount but the concept itself is nothing new.