The detail that stands out to me is that this was the tax authority specifically — the institution with the most sensitive possible data trove deciding the sovereignty question matters more than the migration roadmap. That’s a different calculus than a regular ministry would make.

The DPA precedent probably weighed in too. The Dutch data protection authority has been aggressive on exactly this (the Schrems II follow-throughs, the earlier government guidance against US cloud for personal data). Once your regulator has signaled the position, staying the course turns a technical decision into a legal exposure.