Updated: Aug 31, 2022
Neither Daoism nor Buddhism believe in a god. They both are concerned with personal spiritual development. However, they differ in key ways.
The Nature of Life
One of the main differences between Buddhism and Daoism has to do with the nature of life. Buddhism follows the 4 Noble Truths. The first one says that life is suffering. This differs significantly from Daoism's basic truth which is that life is constant change.
While Daoism acknowledges the suffering of life, it doesn't place such a central emphasis on suffering alone. What Daoism makes central is that change is constant and as a result, don't cling to anything or try to control things. The not clinging to anything part is a conclusion that Buddhism also makes. However, the attitude toward life of a religion that focuses on suffering versus one that focuses on constant change will be different.
As Carl Jung said, "no tree can grow to Heaven unless its roots reach down to Hell."
Part of the whole
Daoism embraces wholeness including the dark parts of humanity and existence. Buddishm seeks to control what they see as evil and to work diligently to suppress or refine it. Many psychoanalysts and therapists such as Carl Jung, Stephen A. Mitchell and Ron Kurtz were fascinated by Daoism's acceptance and curiosity of our dark side. Psychoanalysis works to help people cultivate insight into themselves and know their dark sides. As Carl Jung said, "no tree can grow to Heaven unless its roots reach down to Hell."
Morality and Dogma
This difference has a bigger impact on how Daoism is practiced versus Buddhism. Where Buddhism aims to strive for perfection of spirit, Daoism strives for aligning oneself with Dao--the flow of nature. Dao isn't just the light, it's also the dark. Daoism acknowledges that there is nothing pure in this world and trying to make oneself pure is impossible and contrived. Daoism encourages acceptance of oneself as a speck of dust rather than devoting ones life to a contrived cultivation of purity. This doesn't mean Daoism lacks morality. The virtues of compassion, humility and moderation are present in Daoism.
Enlightenment in Daosim has to do with unlearning and letting oneself be what one's true nature is. Buddhism seeks to purify and perfect through righteous actions. Enlightenment in both religions involve letting go of the ego, but Daoism makes more room for acceptance of human nature where Buddhism sees the darker parts of humanity as evil--evil which must be purified.