Dutch Tax Authority's Outsourcing Plan Raises Sovereignty Concerns

The Dutch tax authority's plan to outsource its VAT system to American company FAST Enterprises has sparked debate about data sovereignty and national security.

Sometimes you think it can't get any crazier. We're going to hand over the management of the platform that runs DigiD to an American company. This wasn't the intention, but it's happening anyway. But it turns out it can get even worse. DigiD is still ours, but the management of the computers is becoming American. But what if you skip that step and let Americans do everything? That's what the tax authority is now planning with VAT.

Every week, about 1.5 billion euros in VAT comes into the government's coffers. That money is needed to pay the bills. If that money doesn't come in, the State will have to borrow on the international capital market very quickly. That can only go so far, and after that, you'll get big pieces written about you in the Financial Times, the kind of pieces you don't want. So VAT is, you could say, "pretty important."

What's the plan now? An American software company, FAST Enterprises, had already been brought in for the modernization of VAT processing. This involved "off the shelf software" that would need to be adapted on a large scale for Dutch use. There's already enough to worry about there, and there's already been a lawsuit about it.

But it turns out that FAST is not only supplying the software, they're also going to do everything. How everything? From the tender:

"Turnkey delivery of a total solution [...] that provides a customer-to-customer process for [all] VAT regulations, including Hardware, System Software and Configuration, after which the OB Solution is taken over by the Contractor for Maintenance and Management, and the Client can be provided with Support."

It says here that FAST is not only supplying the software, but also the servers, and that the software (on those servers) will also be maintained and managed by FAST. And not by the tax authority. They don't even seem to be allowed to log in to those servers themselves!

The management of the software takes place, remotely, by the American company FAST. Now that's already very bad, but the servers also get access to the rest of the tax authority:

The expectation is that the OB Solution will need to be linked to 20 to 25 Applications that are active at the Tax Authority.

The tax authority has outsourced itself to FAST Enterprises. The tax authority itself has a large computer environment, with thousands of employees. But these people have nothing to do with the new VAT system. That's being run by an American company. We can only tell FAST which companies need to pay VAT, and then we just have to hope they'll arrange everything correctly for us.

This is beyond words. What this most resembles is "shadow IT." Shadow IT is when a department decides to use Google Docs for work, instead of the officially provided collaboration software. Microsoft explains well here why this is undesirable.

If you read the tender documents carefully, it becomes clear that this VAT outsourcing can best be seen as shadow IT, which has gone almost entirely outside the normal IT department of the tax authority.

What can go wrong? The question is more what can't go wrong. With this outsourcing, we now have 'VAT as a service' from Americans. If Trump threatens sanctions again, they can immediately revoke all permits from the Dutch State Treasury Agency - within a short time, one and a half billion euros per week will have to be borrowed.

Apart from that, the FAST Enterprises solution will have access to 20 to 25 other tax systems. Full of data from entrepreneurs and businesses. The Attorney General has previously confirmed that this means that the American government is also lawfully (according to their law) allowed to come snooping here.

This really needs to stop. The tax authority has been working on this project for years. There was already criticism earlier. But now that the rollout appears to mean that we're putting our heads completely on an American chopping block, it really needs to stop immediately. In 2026, you can't make your government any more dependent on the US.

Formally, the tender was won by a Dutch BV. But that's only optical. It's about FAST Enterprises. Also, the servers are in the Netherlands, but as we know, that makes little difference.

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Dutch Tax Authority's Outsourcing Plan Raises Sovereignty Concerns

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