Uh, so he collects physical address, location info and deals with all the physical shipping costs just to avoid a single database lookup of a VAT %? O.o

Wat?

The taxes has to be handed in as well, not just charged on the customer. So not only do you need to do the database lookup, you also need to wire the money and fill out any paperwork the customer's country-of-purchase requires.

That's assuming you don't go down the MOSS route, where "any paperwork" is likely to be over a hundred different sets of accounts each covering a subset of transactions, submitted to dozens of authorities in different languages that require you to have authenticated yourself to the individual countries.

Even if you do MOSS it's still not one database lookup. For one thing, you need to get current VAT rates in the particular state that the customer is coming from, which is a significant amount of work just in making sure you're billing people correctly. A good e-Commerce platform will let you use complex tax rules but you still need to make sure that the users are linked to the correct country. If a user comes in, picks Luxembourg as their place of residence rather than Denmark and notices they're saving €30, they're likely to lie about which country they're in. You're required to collect and retain evidence about your supplies, so you end up in the situation where you're having to trust GeoIP to save you from customers looking for a discount at the expense of your tax records.