How to Report Airdrop Income in France: Complete Tax Guide 2024

Understanding Airdrop Income and French Tax Rules

Cryptocurrency airdrops – free distributions of tokens to wallet holders – are considered taxable income in France. Under Article 92 of the General Tax Code, airdrops fall under non-commercial profits (BNC) when received. You must declare their market value at the time of receipt, even if you haven’t sold the tokens. Failure to report can trigger penalties up to 10% of undeclared income plus interest.

Is Airdrop Income Taxable in France?

Yes. The French tax authority (Direction Générale des Finances Publiques) treats airdrops as immediate taxable income upon receipt. Key principles:

• Taxable value = Market price at moment tokens hit your wallet
• Applies to all airdrops exceeding €0.01 in value
• No minimum threshold for reporting
• Social charges (17.2%) + progressive income tax apply

Step-by-Step Guide to Declare Airdrop Income

1. Calculate Fair Market Value

Determine the euro value of tokens when received using:

• Exchange rates from platforms like Binance or Coinbase
• Timestamped blockchain data
• Average price during the hour of receipt

2. Complete Your Tax Return

Use Form 2042-C PRO for BNC income:

• Report total airdrop value in Box 1AC (Professional Non-Commercial Profits)
• Include under “Revenus des professions non salariées” section
• Attach Schedule 2035 for detailed crypto transactions

3. Pay Taxes Due

Tax calculation:

• Social contributions: Flat 17.2% (CSG/CRDS)
• Income tax: Progressive rate up to 45% based on total annual income
• Deadline: Typically May-June following tax year

Record-Keeping Requirements

Maintain for 6 years:

• Date/time of airdrop receipt
• Token amount and project name
• Screenshots of wallet transactions
• Exchange rate proofs
• Any related expenses (e.g., gas fees)

FAQs: Reporting Crypto Airdrops in France

Q: What if I receive worthless tokens?

A: You must still declare them at market value when received. If tokens later become worthless, you can declare a capital loss upon disposal.

Q: Are DeFi airdrops treated differently?

A: No – all airdrops follow the same BNC classification regardless of being from DeFi, NFTs, or traditional crypto projects.

Q: How do I report multiple small airdrops?

A: Aggregate all airdrops received during the tax year and report the cumulative value in Box 1AC. Maintain individual records for each.

Q: Can I deduct wallet or transaction fees?

A: Yes – gas fees and direct acquisition costs are deductible from the airdrop’s taxable value. Document all expenses.

Q: What happens if I sell airdropped tokens later?

A: You’ll pay capital gains tax on any profit from the declared receipt value. Use Form 2086 for capital gains reporting.

Penalties for Non-Compliance

Failure to declare airdrop income may result in:

• 10% penalty on undeclared amounts
• 0.2% monthly interest on overdue tax
• Criminal charges for deliberate fraud
• Tax audits extending back 3-6 years

Always consult a French tax advisor for personalized guidance, as regulations evolve rapidly. Keep detailed records and declare accurately to avoid complications with French tax authorities.