pauloaguia:  I think you're correct that the problem is one of establishing the residence of the customer.  My colleague also mentioned that. 

I believe that Fencer is incorrect in stating that the tax is imposed on him; in principle it is imposed on the customer, and the business merely collects it.  Businesses pay VAT on their own purchases.  Presumably Fencer pays VAT on the fees charged to him by the company that hosts the site, for example.  He also pays VAT on purchases of computer parts and supplies, etc.  This input VAT paid is creditable against the obligation to pay over VAT collected from customers.  Hence, the VAT is not (in principle, again) borne by businesses, but ultimately by consumers.

I suppose that customers outside the EU might be able to claim a refund of the VAT they pay, but that would hardly be worth the effort.