Taxes on For-Profit DAO LLCs
3% Gross Revenue Tax (GRT) on For-Profit DAO LLCs
- For-Profit DAO LLCs in the Marshall Islands must pay a 3% gross revenue tax. The GRT is a tax on top-line revenue but does not apply to capital gains, dividends, or invested capital.
- Members are taxed according to how their own jurisdiction classifies the DAO LLC, and the structure offers flexibility here. US Members, for example, can get the same pass-through treatment as a US LLC by having the DAO LLC elect it on IRS Form 8832, ideally at formation. Without the election, the US treats a For-Profit DAO LLC as a foreign corporation, so the controlled foreign corporation (CFC) or passive foreign investment company (PFIC) rules may apply. How these rules apply to token holders or pseudonymous membership depends on the structure, so please consult legal or tax counsel.
- These taxes can be paid to MIDAO in fiat or cryptocurrency; MIDAO converts crypto payments and sends them to the Marshall Islands government in US dollars. Payment methods lists the currencies and networks we accept.