Token Incentive Plans and Tax Compliance Made Simple

Transcript

foreign hi everyone I think we are past the technical difficulties and if you want to just double check if you're in the right place we will be talking about taxes so this is maybe less chance to run um but if you are here out of your your own will that's great and I definitely owe you a beer later uh my name is Dom I'm a co-founder of toku at Taco we are building token compensation Solutions in today's presentation I will talk a little bit about talking incentive plans and they are also commonly known as token Grant agreements so just to not make them make the mistake between what Kevin was talking a little bit earlier about where you're using grants to fund new projects in my presentation I will

be talking about how to incentivize your employees and your contractors that are working on on the team and are getting paid in token so sort of different form of Grants and we will talk a little bit about tax compliance which is everyone's favorite topic uh so a little bit a few steps back um about what why when and how about token incentive plans and grants in general um a lot of projects that that have a token uh think about how to reward their employees and contractors in tokens it seems like a natural extension right you want to provide the upside in the in the project and in the success to your team of course it is also about incentives alignment

um there's also a part that is maybe not that discussed commonly about um in you know in the changing regulatory environment there are certain exceptions and tags benefits of providing tokens as part of the compensation to your employees and contractors in ways that maybe otherwise wouldn't be able to get to them so maybe there are restrictions on who can invest in your project and maybe you have to be qualified investor or maybe there are other restrictions with respect to holding the tokens that can be mitigated by by using the exemption for compensation there are also projects that don't have a token that use token compensation even even paying people in Stables is sort of

a subset of that but in today's presentation I will be talking about longer term incentives so in the traditional web to Startup you probably would get a stock options or some form of equity compensations in the crypto world you get token and talk investing Awards there are some parallels and there are some similarities but there are also many differences um so so they are worth thinking about when it comes to projects or sort of relevance of this topic it's not only a question of when you already launched the token and then start to think about how to channel the tokens to your employees but a lot of projects that we actually work with are pre-token launch

and they don't even have a estimated date for the for the launch but they want to get it right very early because at that point you know there are big tax benefits from from doing it early where there's the token doesn't have a value or nominal value and making sure that people get those early with limited tax obligations as opposed to later when the token is launched fully liquid and and has a massive value that then obviously translates to to massive tax obligations wow you you got my screen saver as well I hope you'll like that educational part in the middle of the of the presentation and then finally we get to how so um you might be thinking okay so I have

a token and then I have a subset of problems related to making sure that I can pay in my native token to my team but also I just said that there are teams that don't have a token and are also thinking about this problem so it sort of becomes relevant for that for a lot more people and it comes down to thinking about free things thinking about the legal structure so what type of agreements you want to give to your team and you might be thinking about keeping everything on chain there are some benefits there are many many things that are not that effective you know a lot of governments are sort of less less crypto native and are not really Translating that easily things that are Unchained onto the reality creating a lot of problems for people who are

actually the grant recipients so the employees who then have you know maybe a lot of tokens in their wallet but no no actual ability of ramp or or rent an apartment or get a mortgage so legal contracts are really really important they have to be localized so every jurisdiction is slightly different you have to think a bit about those things then track investing and tax obligation so uh you gave the token grants to your employees or contractors and you have to start thinking about okay how many tokens vest per month or what kind of structure is it do people execute and um and actually take advantage of those tokens they sell them what is sort of

happening throughout that that funnel because there are tax obligations that differ depending on you know each action there are obligations that fall on the employer so the the issuer of the token who's giving them to contractors and employees but there are also obligations that fall on the employees and contractors so many different stakeholders in this whole equation and finally you have to think about the distribution so how do I ensure that the employee gets right amount of tokens but also making sure that the tax Authority in a specific jurisdiction is happy um you might be thinking okay those three steps were super easy so why why are we even here like talking about it um and then we are coming to the sort of other questions that happen as soon as you as you think when it's easy so this

this slide is really overwhelming but it's just a subset of questions that we are dealing with on a daily basis at Taco um because token grants are tricky and and tax compliance is is tricky and in crypto everyone is everywhere the teams are fully remote fully distributed and all of a sudden those problems compound but don't worry there there are answers to those questions and if you feel overwhelmed we we will help answer some of them um and I talk that's exactly what we do so at Toko we are simplifying token compensation and tax compliance we deal with projects across the Spectrum so some of the projects that we work with are listed here and there are many more that aren't especially in early stages

at Taco we are are working with projects across different stages above the Project Life Cycle but also token and Grand life cycle we ensure that everyone has legal documentation appropriate for the structure of the token regulatory environment obviously different jurisdictions the incorporation matters where employees and contractors are based matters and then we are doing real-time taxable events tracking and payroll integration making sure that those tokens that are vesting as part of Grants are are looked into sort of within the context of the broader compensation so base salary and the bonuses and and making sure that this is integrated into payroll and then

we are running automated token distribution so making sure that employees actually get them fully tax compliant that contractors get them fully tax compliant with all the reporting and most importantly we work with governments in 100 plus jurisdictions globally on making sure that actually tax Authority in those hundred plus jurisdictions are also happy and that no one is at the risk of of non-compliance so when it comes to you know ways of of thinking about it um if you're an employee receiving token grants if you're a contractor getting paid in crypto if you are a founder of the project and you are thinking about

potentially launching a token in the future or maybe you race on a token warrant or if you already have a token that's liquid and you're already sort of struggling with those things and and have had to find answers to some of those questions behind you can think of us and you can come and chat there is a lot of problems that we solve there is a lot of interesting problems that we get to solve on a daily basis because every token is different regulations change constantly tax code changes every year and there's also a lot of interesting problems that come up you know some of our partners are thinking about launching a nft based grant because that just feels feels right within the context of their project and so there's

a lot of creative work that we do as well as opposed to an uncreative work when it comes to tax reporting there are you know sort of battles that you have to choose where to get creative and where to where to stay uh stay in line with um with with regulations but if you are thinking about some of those problems If you experience some some of those issues reach out here are more details about us we are also here in Paris for the rest of the week so if you want to grab a coffee let us know and I know that we have I think few minutes left so if someone has any questions I'm happy to take maybe one or more if there's an and a question in the audience if not we can go for a beer early

do we have any questions you do no okay I think they all want beer yeah let's go oh sorry I only have probably an amazing speaker after me so please stay thank you [Applause] foreign