Tax Compliance Policy

Entered into force on February 21, 2026.

On-chain voting result: association.dao.eth/transaction-hash

1. General Provisions and Legal Status

1.1. Subject: This Tax Compliance Policy (hereinafter the "Policy") establishes mandatory requirements and procedures for all Fund Recipients (Authorized Representatives receiving compensation, Grant Recipients, Contract Executors, third parties) (hereinafter collectively "Recipients") regarding their tax obligations.

1.2. Objective: The primary objective of this Policy is to protect the Association from secondary tax liabilities, claims by tax authorities regarding permanent establishment status, employer status, and withholding tax obligations in the jurisdictions of the Recipients.

1.3. Status: The Association is a decentralized association pursuant to Art. 60 et seq. of the Swiss Civil Code. The Association is not an employer of the Recipients.

1.4. Nature of Payments: Payments made by the Association (compensations, Grants, service fees, expense reimbursements):

1.4.1. Are made for independent services or as unilateral Grants in support of the Mission.

1.4.2. Are not salaries or other payments under an employment contract, and accordingly, are not subject to social contributions and taxes on the part of the Association.

1.5. Tax Liability: The Association relies on the principle established in the Governance Resolution that all tax liability for received funds, including personal income tax (or equivalent), profit tax, VAT (or equivalent), and social contributions, fully lies with the Recipient.

1.6. Applicable Law: This Policy is governed by the substantive law of Switzerland. Lex Cryptographica (protocol code) is applied subsidiarily.

2. Recipient Obligations

2.1. Determination of Tax Status: Each Recipient must independently determine their tax status, classification of received funds (as income, grant, reimbursement, or capital gain), and corresponding tax obligations in their home jurisdiction (tax residency jurisdiction).

2.2. Timely Payment: The Recipient must timely and fully pay all applicable taxes, fees, and mandatory contributions (social and medical insurance) arising from receiving funds from the Association.

2.3. Liability: Upon receiving Grants, the Recipient confirms awareness of their jurisdiction’s legislation regarding grant taxation and assumes full responsibility for correct tax classification and reporting.

2.4. Tax Reporting: The Recipient is obliged to independently and timely file all required tax declarations and reports with competent authorities of their jurisdiction reflecting income received from the Association.

2.5. Documentation Retention: The Recipient must retain sufficient documentation (including the Executive act and on-chain transaction) for the period prescribed by the law of their home jurisdiction to substantiate the nature, amount, and date of funds received.

2.6. Good Faith: Upon Association request (e.g., within audit or in response to regulator inquiry), the Recipient must provide reasonable evidence of their tax good faith (e.g., notarized statement of independent contractor status, extract from tax legislation, or local tax consultant opinion).

2.7. Control: Recipients, especially Representatives, must comply with all requirements of the Association’s Anti-Money Laundering, Counter-Terrorism Financing, and International Sanctions Policy, including reporting transactions subject to mandatory control in their jurisdiction.

2.8. Violations: Violation of tax legislation in the Recipient’s jurisdiction is considered by the Association as a breach of fiduciary duties established by the Mandate Agreement or Service Agreement and entails consequences prescribed by Section 4 of this Policy.

3. Association Protection and Indemnification

3.1. Representation: Each Recipient, by accepting funds from the Association, irrevocably represents and warrants that they are an independent entity and do not have employee or agent status of the Association capable of creating the Association’s permanent establishment in their jurisdiction.

3.2. Indemnification: The Recipient agrees to indemnify the Association, its Representatives, and members against any claims, demands, fines, penalties, additional tax assessments, and legal costs arising from the Recipient’s failure or improper compliance with tax or social legislation of their home jurisdiction.

3.3. Legal Support Fund:

3.3.1. Funds of the Legal Support Fund, established by the Association’s Governance Resolution, may not be used to cover personal tax liabilities of the Recipient.

3.3.2. The Legal Support Fund may be used exclusively to pay legal services related to defending the Association against tax authorities’ claims caused by the Recipient’s bad faith, pursuant to the Indemnity Agreement. In such defense, the Association has the right to seek reimbursement of these expenses from the Recipient.

4. Breach and Termination

4.1. Material Breaches: Any violation of this Policy, including failure to fulfill tax obligations or actions that lead to claims against the Association for secondary liability, employer status, or permanent establishment, is deemed a material breach of the Mandate Agreement, Executive Act, or Service Agreement.

4.2. Consequences of Breach: Upon establishing a material breach, the Association is entitled to:

4.2.1. Immediately terminate the Executive Act or Service Agreement.

4.2.2. Recover damages from the Recipient, including amounts paid by the Association for fines and legal costs.

4.2.3. Temporarily or permanently block the Recipient’s address from receiving future funds and participating in Voting.

4.3. Decision on Enforcement: Decisions on sanctions application are made in accordance with the procedure established by the Governance Resolution and the Arbitration Rules (incorporated into the document package).

5. Effective Date and Amendments

5.1. Effective Date: This Policy comes into force simultaneously with the date and time the Governance Resolution enters into force.

5.2. Amendments: Any changes to this Policy may only be made through Voting with Qualified Confirmation conducted pursuant to the Governance Resolution.

5.3. Notice: Continued use of the Association’s website, software, and Tokens after posting amendments signifies user acceptance of the updated Policy.