There's no cost to register for VAT in the UK. (Are you saying that in Germany you must pay money in exchange for the right to pay more tax. Wow!)

Once you register, you need to file quarterly VAT reports. This is a manageable burden (after all, even your local plumber probably has to do it). But the local plumber doesn't have customers and expenses around the world.

When you try to work out the VAT implications of overseas device purchases, conference registrations, international software sales, support contracts etc you usually need to pay an accountant, especially when you try to apply the rules to a ringtone purchased by a customer using a PayPal account from country A, but the ringtone was actually downloaded from a server in country B while the customer was in country C, and you live in country D and are getting a commission from a store operated in country E but you bought some online advertising from a search engine in country F. And there are very different rules for the VAT-accounting of tangible and non-tangible items.

Bleah! That's one of the reasons why a company (or individual trader) isn't required to register and account for VAT until their turnover reaches a certain amount (£67,000 per year in the UK). If you're making more than £67,000 per year, you can afford to pay an accountant a few thousand to sort it all out.

There's no inherent reason why Nokia must only deal with VAT-registered companies. It's just a way to simplify their life and keep their costs down.

Regards,
Roger