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20. TAXATION OF DAOs

The taxation of DAOs recognized by this Model Law will be based on the following principles:

  • By default, any DAO recognized by this Model Law will be treated as a pass-through entity for tax purposes, with no entity-level tax accruing to the DAO. Any realized gains will pass through to the DAO's Members in proportion to their Token holdings.

  • Where a Member itself is not a taxable entity, such as another DAO, the realized gains allocated to such Members will pass to the first taxable person in the same manner as specified in Article 20(1).