Airdrop Taxes 101: How Airdrops are Taxed Around The World
Airdrops are a popular way for crypto projects to distribute tokens to early users, and other relevant people in the community. But as exciting as “free money” is to you, you’re not the only one printing. Most tax authorities treat airdrops as taxable income, so you can expect to be sharing those profits.
While each country approaches airdrops differently, the United States IRS takes a particularly strict stance, taxing most airdrops as ordinary income at the time of receipt, even if you didn’t ask for the tokens.
💡 How Are Airdrops Typically Taxed?
In general, there are two ways countries handle airdrops:
Taxable upon receipt as income: You owe taxes based on the market value when you receive the tokens.
Additional capital gains taxes are owed if you later sell the tokens.
Taxable only upon sale as capital gains: You don’t owe anything until you sell, and the taxable event is treated like selling any other asset.
The tax treatment depends on local rules about crypto classification and how they define “income.”
🇺🇸 Airdrop Taxation in the United States (IRS Rules)
The IRS considers airdrops to be taxable income when you have "dominion and control" over the tokens. This means:
You owe taxes on the fair market value (FMV) of the airdrop at the time it hits your wallet, whether or not you later sell it.
The airdrop is reported as ordinary income and taxed according to your income tax bracket (up to 37% federally in 2025).
If you later sell the airdrop, any gain or loss is taxed again as capital gains (short- or long-term).
This has major implications, especially if the token value drops significantly after the airdrop, leaving users stuck with a tax bill larger than the asset’s worth. Please see our guide for a full view of how crypto is taxed in the USA.
🌎 Global Airdrop Tax Comparison
The table below summarizes how different countries treat airdrops, including whether they are taxed, how they are classified, and the potential tax rate ranges:
Country | Airdrops Taxed? | Tax Type | Approx. Tax Rate Range |
USA | Yes | Income + Capital Gains | 10%–37% (income), 0%–20% (CGT) |
UK | Sometimes | Income or Capital Gains | 20%–45% (income), 10%–20% (CGT) |
Canada | Yes | Income | 20.5%–33% federal (plus provincial) |
Australia | Yes | Income or Capital Gains | 0%–45% (income), 0%–23.5% (CGT) |
Germany | Usually no | Capital Gains only | 0% (if held >1 year), 25% (if <1 year) |
France | Yes | Income (misc. gains) | ~30% flat (including social contributions) |
Japan | Yes | Income | 5%–45% (progressive) |
South Korea | Yes | Income | 6%–45% (progressive) |
Portugal | No | Not taxed | 0% for individuals |
Ireland | Yes | Income | 20%–40% |
Switzerland | Sometimes | Income (self-employed) | Varies by canton |
Netherlands | Yes | Wealth tax system | ~1.5% of assumed value annually |
Spain | Yes | Income | 19%–47% |
Italy | Yes | Income or CGT | ~26% |
Austria | Yes | Capital Gains (flat) | 27.5% |
Norway | Yes | Income | Up to ~38% |
New Zealand | Yes | Income | Up to 39% |
Belgium | Sometimes | Income or CGT | 0%–33% |
Finland | Yes | Income | Up to 44% |
Denmark | Yes | Income | Up to 52% |
💬 Note: This is a simplified guide. Always consult local tax professionals or software like Awaken Tax to determine your exact obligations. You can also read our Global Crypto Tax Landscape Guide for 2025 here.
🧾 Final Thoughts
Airdrops can lead to unexpected tax bills, especially if tokens plummet in value after receipt. In most jurisdictions, especially the U.S., you may owe taxes before you've sold anything. Using dedicated crypto tax tools can help you track airdrops, value them correctly, and stay compliant without the headache.
