The Dutch tax office will move its email and office software to Microsoft’s cloud services despite concerns about privacy, junior finance minister Eugène Heijnen told MPs in a briefing on Thursday. The decision also applies to customs correspondence and the supplementary benefits department.

Heijnen said the move to Microsoft 365 follows “a phased and careful process” that began in 2021, when staff received new laptops but continued to work with outdated internal systems.

The change covers office tools such as Outlook, Teams and OneDrive, which will be used for email, calendars, meetings and file-sharing. The ministry stressed that “core processes” such as tax collection will continue to run on systems in its own data centre in Apeldoorn.

Concerns about reliance on American cloud providers have grown in recent years, especially since the US government forced Microsoft to block the email account of the International Criminal Court president after the court issued arrest warrants for Israeli leaders.

Under the US Cloud Act, cloud service providers can also be required by law to make information available to government authorities, even if the storage is located in Europe.

Dutch public bodies already make extensive use of Microsoft’s cloud, including parliament and the financial markets regulator, but until now the tax office had held back.

Officials acknowledged that risks remain, including the possibility of US authorities demanding access to data or cutting off services. To limit that risk, the tax office will keep a live back-up of all information stored in Microsoft’s cloud at a cost of €2 million a year, allowing it to continue operating if access is withdrawn.

Alternative scenarios, such as using a European provider or keeping the servers in house, were more expensive, slower to implement or lacking in functionality,  Heijnen said.

“Working in the outdated environment is costly, inefficient and hampers hybrid working,” Heijnen wrote. “With M365, staff will have access to a modern workplace that meets today’s requirements.”

The government said in January it would explore how to reduce dependence on foreign cloud service providers, following an audit office report which said government ministries use cloud storage to manage 1,588 services, of which 700 are based on open services offered by American companies such as Amazon, Microsoft, and Google.

In March MPs urged the government to stop migrating confidential information about tax returns, contracts, and medical records to US cloud services, saying they are a threat to Dutch cyber security.