The key is that was used to be a B2C transaction now becomes a B2B transaction as consumers register for VAT since they are now in the business of selling "digital services" when they purchase anything with Bitcoin. In many cases the will be forced to register for VAT because they will go over the minimum in transaction volume. Now if you turn every transaction into a B2B transaction there is never any "value added" and hence no tax.
I see, thank you for the explanation. I need to think about it but I am intrigued.
By the way, I had a somewhat similar case in the past where an unexpected quirk caused a benefit to me. In the EU, I need to be resident in a country in order to have a health insurance there. However, because I have a business registered in a country where I'm not resident, I am obligated to have health insurance in that country as well, even though I pay the minimal contribution. This allows a broader spectrum of services being available to me.