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Tax Infinity & Beyond Galya Savir * ABSTRACT Commercial activities in space are going to expand thanks to new game-changing technologies being developed by Space Entrepreneurs. These entrepreneurs have pledged to reduce the cost of accessing space, and plan to unlock new horizons for innovative space markets, such as mining space-based resources and space tourism. Signs are showing in Congress of the impact that the space technology phenomenon is having on the U.S. legal system and on other governments’ policy decisions worldwide. Realizing the promise of expanding the United States' aerospace economy has raised myriad legal challenges, one of which is the issue of taxation. Thus, there is no time like the present to review the tax rules, at both the federal and the international levels, to ensure the sustainability of a policy that is clearly in the public interest. With the globalization of the world, the dramatically changing economic platforms and with the anticipated BEPS-driven changes to domestic law and double tax treaties once implemented, now might be the right time to rethink the current source rule for space-based income. A space tax regime should be formulated to ultimately prevent the space industry from engaging in the kind of harmful tax avoidance, through profit-shifting to tax havens, that has plagued income from the shipping industry. The space tax regime should also enable to provide some economic certainty (read: return on investment) to the entrepreneurial members of the private sector. This will ensure that they will/ enable to embrace and promote the Second Space-Age while maintaining the peaceful state of affairs, and encourage the participation of multinational corporations and nongovernmental entities in the exploration of space and its commercial uses. In addition, an effort could be made to coordinate the approach to space-based taxation with the United States' international obligations under the Space law. This is the time to consider that a small step for legislation can be a giant leap towards a broad tax base. Space could very well be the right place to enforce a unique and different tax approach. * Research Scholar at Michigan Grotius Research Scholar Program, the University of Michigan. I would like to thank Professor Avi-Yonah, Irwin I. Cohn Professor of Law and Director, International TAX LL.M., the University of Michigan, for supporting my research.

Tax Infinity & Beyond- Abstract; Savir, Galya

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Tax Infinity & Beyond

Galya Savir*

ABSTRACT Commercial activities in space are going to expand thanks to new game-changing technologies being developed by Space Entrepreneurs. These entrepreneurs have pledged to reduce the cost of accessing space, and plan to unlock new horizons for innovative space markets, such as mining space-based resources and space tourism. Signs are showing in Congress of the impact that the space technology phenomenon is having on the U.S. legal system and on other governments’ policy decisions worldwide. Realizing the promise of expanding the United States' aerospace economy has raised myriad legal challenges, one of which is the issue of taxation. Thus, there is no time like the present to review the tax rules, at both the federal and the international levels, to ensure the sustainability of a policy that is clearly in the public interest. With the globalization of the world, the dramatically changing economic platforms and with the anticipated BEPS-driven changes to domestic law and double tax treaties once implemented, now might be the right time to rethink the current source rule for space-based income. A space tax regime should be formulated to ultimately prevent the space industry from engaging in the kind of harmful tax avoidance, through profit-shifting to tax havens, that has plagued income from the shipping industry. The space tax regime should also enable to provide some economic certainty (read: return on investment) to the entrepreneurial members of the private sector. This will ensure that they will/ enable to embrace and promote the Second Space-Age while maintaining the peaceful state of affairs, and encourage the participation of multinational corporations and nongovernmental entities in the exploration of space and its commercial uses. In addition, an effort could be made to coordinate the approach to space-based taxation with the United States' international obligations under the Space law. This is the time to consider that a small step for legislation can be a giant leap towards a broad tax base. Space could very well be the right place to enforce a unique and different tax approach.

*Research Scholar at Michigan Grotius Research Scholar Program, the University of Michigan. I would like to

thank Professor Avi-Yonah, Irwin I. Cohn Professor of Law and Director, International TAX LL.M., the University

of Michigan, for supporting my research.