DAOs and governance tokens: income, gain or taxable person?

The nature of the governance token

A governance token confers on its holder voting rights over the protocol: proposals, modification of parameters, disposal of the treasury. It may or may not have a market value. Where it is received as a reward for an activity —liquidity mining, participation in votes, contributions to the protocol—, it generates income that must be classified.

The tax framework: three possible classifications

Depending on the context, three classifications are possible. The first, income from an economic activity, where the taxpayer carries on an organised activity to obtain them —for example, liquidity mining as a habitual activity—; they are taxed in the general base at their market value at the moment they are obtained. The second, investment income, defensible in some passive cases linked to staking or the economic transfer of tokens, provided the specific mechanics of the protocol and of the right received allow it. The third, a capital gain, where the tokens are received for free, in which case the fit may approach that of a gratuitous acquisition; even so, it should not be asserted without nuance that they will always go to the savings base, since a gratuitous acquisition not arising from a disposal is included, as a rule, in the general base.

The DAO as a taxable person

If the operator is a DAO with a presence or effects in Spain, the question arises of whether it can be considered a taxable person for Corporate Income Tax (IS) or for Non-Resident Income Tax (IRNR). DAOs do not have recognised legal personality in Spain, which creates uncertainty: depending on their configuration, they could be classified as a community of property, a civil-law partnership or, in the worst case, an irregular company, with different tax consequences in each case.

There is at least one useful ruling, V2479-22, which analyses the services provided by an individual to a DAO for the purposes of the Tax on Economic Activities (IAE) and VAT, contemplating remuneration in cryptocurrencies. What remains unresolved directly is the taxation of governance tokens received in passive contexts and, above all, the possible treatment of the DAO itself as a taxable person for Corporate Income Tax or Non-Resident Income Tax.