Out of This World: Tax Challenges and Solutions for the Outer Space Economy

The rapid commercialization of outer space has revealed significant gaps in existing international tax regimes. This article examines the challenges of taxing space-based activities in a stateless domain governed by international non-tax treaties, focusing on satellite operations and space mining. It highlights disparities amongst countries, such as the classification of satellites as permanent establishments and the revenue therefrom as income or royalties, which disparities reflect efforts by developing countries to secure taxing rights over locally sourced economic activities. Space mining presents even greater challenges due to the absence of a global framework, risking unregulated competition and harmful unilateral practices. The article advocates for an international regime similar to the United Nations Convention on the Law of the Sea to foster fiscal stability and equity. With regard to Europe, the article notes that policy is lacking and there is a need for Europe to strengthen its fiscal approach to ensure competitiveness and innovation in this area.