Space Tax Law – The New Wealth of Space | Study
PRESS RELEASE
Space Tax Law
The new wealth of Space
In tax law, the calculation and collection of taxes have always rested on two cardinal principles: the concept of tax residence and that of a company’s permanent establishment. Underlying them is a precise requirement: to link the wealth produced to the territory in which it is produced; and, therefore, to national borders, within which each State may exercise its sovereignty in matters of taxation too. However, this paradigm begins to falter as soon as one leaves the terrestrial horizon to enter the, so to speak, “celestial” one.
The space race, and the transfer, now physical as well, of technologies and economic activities into orbit, are progressively undermining this fiscal frame of reference. The future contest will therefore be played out on the ground of regulatory updating: current legislative instruments are largely obsolete, as numerous international legal cases now demonstrate. Hence the need for a future global Space Tax Law, capable, if well drafted, of moving beyond current geographical, political and legal concepts. Legislation that will have to recognise that the “space” dimension of the economy requires a new principle of public contribution, founded on a renewed sense of global community.
Activities such as the extraction and exploitation of resources from celestial bodies (space mining), the operation of satellite communication services or of servers physically located, for example, on the Moon or on an asteroid, and even so-called “space tourism”, take place in a territory literally unknown to the tax authorities, a “no man’s land” which, by definition even before international treaties (beginning with the Outer Space Treaty concluded under the aegis of the United Nations in 1967), cannot belong to any State, still less to private self-interest.
The central question is not so much what, how and how much to tax, but above all according to which rules and criteria to redistribute the fruits of the wealth produced in orbit. The study by the Eurispes Laboratory on fiscal and tax policies, coordinated by lawyer Giovambattista Palumbo, indeed highlights the real risk that, without adequate legislation, space will become yet another economic and above all tax haven for a chosen few, generating disparities between States more or less capable of investment.
An analysis of the figures, moreover, conveys the concrete scale of a contest that is no longer merely a matter for the future. Luxembourg, among the countries most active in attracting capital to the sector, has allocated 115.8 million euros for the period 2026-2029 to the LuxIMPULSE programme, within an overall package of 265.1 million euros earmarked for the space sector, also providing non-repayable grants of up to 150,000 euros for start-ups. At European Union level, the EU Space Act could entail authorisation costs in the order of 100,000 euros per satellite platform and fees of between 200,000 euros and 1.5 million euros for heavy launchers, with an estimated increase of between 3% and 10% in satellite production and IT management costs.
Even more significant is the picture that emerges from the scenarios for future taxation. A possible Orbit Tax (conceived along lines similar to those of the Carbon Tax) could start at around 14,900 dollars a year per satellite, rising progressively to 235,000 dollars by 2040; according to estimates, fiscal and environmental management of orbits could help to increase the value of the global satellite industry to around 3,000 billion dollars by 2040, compared with an estimate of around 600 billion in the baseline scenario. The so-called Space Tourism Tax likewise shows how the fiscal lever can take on a function that is not only revenue-raising but corrective: the United States proposal to this effect provides, among other things, for a levy equal to around 10% of the ticket price for commercial space flights, set against per capita emissions which, for a space flight, can be up to 60 times higher than those of a scheduled transatlantic flight.
Some possible proposals for the construction of a future Space Tax Law shared at international level could range from the establishment of an International Space Authority, to be entrusted with managing the resources and proceeds deriving from extra-atmospheric activities, to the definition of a system of royalties on the exploitation of the resources of the Moon and asteroids, through to the idea of taxation modelled on the experience of the Web Tax, based not so much on the place of registration of the satellite or the company as on orbital presence and on the market in which the revenues are generated. The proposals also include an Orbit Tax to finance debris removal and offset the environmental externalities of space activities, progressive taxation of space mining and, looking ahead, even a Space Border Tax on goods produced in space and reimported to Earth.
The common thread running through these proposed solutions is the idea that space taxation should not confine itself to transferring terrestrial tax models into space, but should instead build a new balance between economic exploitation, sustainability and the collective interest. The proceeds of any international taxation could thus feed, on the one hand, a Sustainability Fund intended, for example, for the removal of space debris and, on the other, a Compensation Fund aimed at redistributing part of the resources to countries without direct access to space, in accordance with the principle of the common heritage of Mankind. Ultimately, the prospect is that of a tax system which does not merely establish who must pay, but which also defines to whom, in economic and collective terms, the wealth produced beyond Earth’s borders belongs.
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