When you buy something, the seller pays a VAT tax (something about 17% to 23% of your purchase, depending on the country).
If I'm a French company and I sell something to a customer in Finland (we would be both in the EU) taxes would be paid in either France or Finland (it depends on the kind of thing I'm selling and the kind of customer).
If I understand correctly, they want to tax digital services in the place where the work is actually generated. So, in France.