How to Report Airdrop Income in France: Your Complete Tax Guide

Introduction: Airdrops and French Tax Obligations

Cryptocurrency airdrops—free distributions of tokens to wallet holders—are exciting opportunities in the crypto world. But in France, they come with tax responsibilities. The Direction Générale des Finances Publiques (DGFiP) treats airdrops as taxable income, requiring precise reporting on your annual tax return. Failure to comply can lead to penalties. This guide explains how to accurately report airdrop income under French tax laws, helping you avoid common pitfalls and stay compliant.

Understanding Airdrop Taxation in France

In France, airdrops are classified as “revenus divers” (miscellaneous income) under Article 92 of the General Tax Code. The taxable event occurs at the moment you receive the tokens, based on their market value in euros on that date. For example, if you receive 100 tokens worth €1 each during an airdrop, you must declare €100 as income. If you later sell those tokens at a profit (e.g., for €150), the €50 gain is subject to capital gains tax. As of 2024, this includes a 30% flat tax (12.8% income tax + 17.2% social contributions). Always verify current rules via impots.gouv.fr, as regulations evolve.

Step-by-Step Guide to Reporting Airdrop Income

Follow these steps to ensure accurate reporting:

1. Record Airdrop Details: Note the date, token name, quantity received, and market value in EUR at receipt time. Use reliable exchanges like Binance or CoinGecko for valuation.
2. Calculate Total Annual Income: Sum the euro value of all airdrops received in the tax year.
3. Complete Form 2042: Report the total under “Box 1AC (Revenus divers)” on your income tax return.
4. Handle Sales Separately: If you sold airdropped tokens, file Form 2086 for capital gains/losses. Subtract the original declared value from the sale price to determine profit.
5. Pay Taxes Owed: Income tax applies to the initial airdrop value. Capital gains tax (30%) applies only to profits from sales.
6. Keep Documentation: Store transaction records, wallet screenshots, and valuation proofs for 6 years.

Common Mistakes to Avoid

• Ignoring “Free” Tokens: All airdrops are taxable upon receipt—even if you didn’t pay for them.
• Incorrect Valuation: Using the wrong exchange rate or failing to convert to euros at receipt time.
• Mixing Income and Capital Gains: Reporting the initial airdrop value as zero and only declaring profits upon sale.
• Poor Record-Keeping: Losing track of dates or token values, complicating audits.
• Missing Deadlines: French tax returns are due in May/June annually. Late filings risk fines up to 10% of owed tax.

Frequently Asked Questions (FAQ)

1. Is airdrop income always taxable in France?

Yes. The DGFiP considers airdrops as miscellaneous income, taxable at market value upon receipt. Exceptions are extremely rare.

2. How do I value tokens if they’re not listed on exchanges?

Estimate based on similar assets or the project’s token sale price. Document your methodology. If entirely illiquid, consult a tax advisor.

3. Do I report airdrops if I haven’t sold the tokens?

Yes! You must declare their value when received. Selling later triggers separate capital gains reporting.

4. What forms do I need for airdrop taxes?

Use Form 2042 for the initial income (Box 1AC). For sales, add Form 2086. Both are part of the annual income tax declaration.

5. What penalties apply for unreported airdrops?

Fines start at 10% of evaded tax, plus interest. Deliberate concealment can lead to criminal charges.

6. Are DeFi or NFT airdrops treated differently?

No—all follow the same rules. Value them at receipt and report as “revenus divers.”

Disclaimer: Tax laws change frequently. Always consult a French tax professional or the DGFiP for personalized advice.