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

## IntroductionnWith the rise of cryptocurrency, airdrops have become a popular way for projects to distribute tokens. But in Spain, these “free” coins come with tax responsibilities. Failing to report airdrop income can lead to penalties from the Agencia Tributaria (Tax Agency). This guide explains exactly how to declare airdrops correctly under Spanish tax law, helping you stay compliant while navigating crypto taxation.nn## What Are Cryptocurrency Airdrops?nAirdrops involve free distribution of crypto tokens or coins to wallet addresses, often to:n- Promote new blockchain projectsn- Reward existing token holdersn- Encourage community engagementnUnlike mined or purchased crypto, airdrops are received without direct payment. Common types include:n1. **Standard Airdrops**: Tokens sent to all wallet holders of a specific blockchainn2. **Bounty Airdrops**: Rewards for completing social media tasksn3. **Holder Airdrops**: Distributions based on existing token holdingsnn## Is Airdrop Income Taxable in Spain?n**Yes.** Spain treats airdrops as taxable income under these rules:n- **Personal Income Tax (IRPF)**: Airdrops are considered “occasional capital gains” or “other income” at market value when received.n- **Tax Trigger**: Tax liability arises upon receipt, not when selling.n- **No Minimum Threshold**: Even small-value airdrops must be declared.n- **Professional Traders**: Frequent airdrop recipients may face business income tax rates.nn## Step-by-Step Guide to Reporting Airdropsn### Step 1: Record Key DetailsnDocument for each airdrop:n- Date receivedn- Token name and quantityn- Market value in EUR at receipt time (use reputable exchanges like CoinMarketCap)n- Associated wallet addressesnn### Step 2: Calculate Taxable ValuennValue = Quantity × Market price (EUR) at exact receipt timen*Example: Receiving 100 XYZ tokens when 1 XYZ = €0.50 → Taxable income = €50*nn### Step 3: Declare on Annual Income Tax Return (IRPF)nInclude airdrop values in Form 100:n1. **Box 020 (Other Gains)**: For non-professional recipientsn2. **Box 042 (Business Income)**: For professional crypto tradersn3. Attach **Form 720** if total foreign crypto assets exceed €50,000 (includes exchange holdings)nn### Step 4: Report Subsequent SalesnIf you later sell airdropped tokens:n- Calculate capital gains: Sale price minus original receipt valuen- Declare gains/losses in **Box 029 (Capital Gains)**nn## Common Mistakes to Avoidn- **Ignoring small airdrops**: All values must be reported, even under €50.n- **Using incorrect valuation**: Always use EUR value at receipt time, not sale time.n- **Missing Form 720**: Required for offshore exchange balances over €50,000.n- **Mixing personal/professional status**: Professionals face higher tax rates and VAT risks.nn## FAQ: Airdrop Taxes in Spainnn**Q: Do I pay tax if I never sell the airdropped tokens?**nA: Yes. Tax applies upon receipt based on market value, regardless of whether you sell.nn**Q: What if the airdrop has no market value yet?**nA: If tokens aren’t tradable upon receipt, tax is deferred until they gain market value or are sold.nn**Q: Can I deduct transaction fees?**nA: Only for subsequent sales (e.g., exchange withdrawal fees reduce capital gains). Receipt costs aren’t deductible.nn**Q: How does the Tax Agency track airdrops?**nA: Through crypto exchange KYC data and Form 720 declarations. Non-compliance risks audits and fines up to 150% of owed tax.nn**Q: Are NFT airdrops taxed differently?**nA: No. They follow the same income valuation rules as token airdrops.nn## Key Takeawaysn1. Airdrops are taxable income in Spain at market value upon receipt.n2. Report values in IRPF Form 100 (Box 020 or 042).n3. Maintain detailed records of dates and valuations.n4. Use Form 720 for foreign assets exceeding €50,000.n5. Consult a gestor for complex cases or professional trading activity.nn*Disclaimer: This guide provides general information, not tax advice. Crypto regulations evolve – always verify with a Spanish tax professional.*