Airdrop tax: when free coins are taxable in Germany

Whether you have to pay tax on an airdrop hangs on a single question: did you do something for the coins? If you had to post on a social network, fill in a form or hand over data going beyond your wallet address, you have other income from services, and that is subject to income tax from 256 euros in a calendar year. If, by contrast, the coins landed in your wallet without any action on your part, the inflow itself is not worth any income tax, but it can fall under gift tax law. That distinction does not come from a law firm's reading, it is set out word for word in the current circular of the German Federal Ministry of Finance on crypto assets.

This article takes you through both cases, shows you which price to use for the valuation, what happens on a later sale, and which records the tax office has expected of you since the 2025 assessment period.

Airdrop and tax: the short answer first

For tax purposes an airdrop is not a category of its own. The Income Tax Act has no word for it. Instead every airdrop is sorted into one of the existing drawers, and which one it is depends solely on the relationship between you and the project handing out the coins.

Three outcomes are possible. First: you rendered a service, in which case the coins are recorded on receipt as other income under Section 22 No. 3 of the Income Tax Act, valued at the market price at the time of acquisition. Second: you did nothing, in which case a gift comes into consideration, governed by inheritance and gift tax law rather than income tax. Third: the airdrop belongs to a business, in which case it is business income. For private investors the first two cases are the rule.

The second step is the important one, and many overlook it. Selling the coins is a separate event with its own rules. Whether it becomes a taxable private disposal transaction depends on whether the inflow was an acquisition at all. That switch is thrown on receipt, not on sale.

What an airdrop is: the German finance ministry's definition

Airdrop denotes the free distribution of crypto assets to a large number of addresses. The Federal Ministry of Finance describes this in its circular of March 6, 2025 on individual questions of the income tax treatment of certain crypto assets (margin number 29) as a marketing exercise whose design can vary widely.

The circular expressly names four variants there. Participants must fill in several online forms so that customer data can be collected. Or they are meant to promote the project on social networks. With larger airdrops, sometimes only a portion of those who meet all the conditions actually receive coins, for instance after a random selection. And finally, an airdrop can take place entirely without any action by the holder of a public key.

Those four variants are not there for illustration; they form the map by which the tax office sorts your case. If you are later asked to show which variant your airdrop fell into, you will need exactly the conditions that applied at the time. This article returns to that in the section on record-keeping obligations.

The circular of March 6, 2025 replaced the older BMF circular of May 10, 2022, incidentally, and is the first to use the term crypto assets instead of virtual currencies and other tokens. Anyone still working with the 2022 version is working from a superseded text. An overview of all current airdrops and the conditions of the individual projects can be found in our airdrop overview.

The key question: did you have to do anything for the airdrop?

The term everything hangs on is service. In tax law it is drawn more widely than everyday usage suggests. Any active, passive or non-economic conduct of whatever kind can qualify as a service. A reciprocal contractual relationship between you and the project is expressly not required.

Active conduct on social media

In margin number 70 the ministry names the clearest case: where interested parties have to render a service, in particular active conduct such as naming the airdrop or the project's initiator in social media posts, other income arises. The marketing character of the exercise changes nothing about that. Anyone posting, working through a task list or recommending a project is rendering a service within the meaning of the law.

The same paragraph covers a second case that is often overlooked in practice: anyone uploading their own images, photos or videos to a platform and receiving crypto assets for it is likewise rendering a service. That applies even where ownership of those images stays with you.

Personal data beyond the public key

Margin number 71 draws a line that is easy to remember. For the mere allocation of an airdrop, your wallet's public key is technically enough. Everything beyond that is a service. If the allocation depends on you making data about yourself available that goes beyond the information required for the technical allocation, that handing over of data is your service, for which you receive crypto assets in return.

That is to be assumed at any rate where you are obliged, or have to declare yourself willing, to make personal data available. The ministry expressly distinguishes this from classic discount schemes and prize draws, where a postal address is needed for identification purposes anyway. With an airdrop it is not.

In practice that means: the email address in the sign-up form, filling in a profile, linking a social media account, stating your country and date of birth. Every one of those steps turns the supposed gift into consideration.

Airdrop in return for something: other income under Section 22 No. 3 of the Income Tax Act

Once it is established that you rendered a service, Section 22 No. 3 of the Income Tax Act applies. The coins are to be recorded in the year in which they accrued to you, in other words the moment at which you can dispose of them. The sale plays no role in this first act of taxation. That is the point at which airdrops regularly become an unpleasant surprise: the tax arises on a value that you do not yet hold in euros at that time.

The value to be applied is the market price at the time of acquisition. That amount goes into your income tax return and is charged at your personal tax rate. At the top rate that can be well over forty percent of the inflow value, while the token itself may lose value in the weeks that follow. Precisely this divergence between the moment of taxation and the moment of sale is the real risk with airdrops.

The 256 euro threshold and why it breaks sooner than you think

Section 22 No. 3 sentence 2 of the Income Tax Act contains a relief: income from services is not subject to income tax if, together with other income from services, it amounts to less than 256 euros in a calendar year.

Two features of that limit are regularly misunderstood. First, it is an exemption threshold and not an allowance. Stay below it and everything remains tax free. Reach 256 euros and the entire amount is taxable, not merely the excess. A single euro decides here whether the complete amount is taxed.

Second, it applies to all service income of a year taken together. Several airdrops add up. And they also add up with service income that has nothing to do with crypto, such as the occasional letting of movable property or other occasional intermediary services. Anyone taking part in five airdrops spread over the year and receiving coins worth sixty euros each time lands at 300 euros and is therefore fully within the scope of taxation.

Airdrop with nothing given in return: a gift rather than income tax

The second basic case is the airdrop that appears in the wallet without any action on your part. Where the allocation is not economically connected to a service, margin number 74 of the BMF circular states that a gift comes into consideration, for which the gift tax rules are to be observed.

For income tax that means: nothing happens. No inflow of service income, no 256 euro limit, no line in the annex for other income. Gift tax follows different rules with allowances of its own, which depend on the relationship between donor and recipient and apply for a period of ten years at a time. At the usual amounts of a marketing airdrop this remains practically without consequence, but the inflow has not thereby fallen into a legal vacuum.

This case is rarer than it appears in forums. The vast majority of airdrops are tied to some condition or other, even if only the linking of an account. The classic unconditional case is the token that an unrelated project distributes unprompted to a large number of active addresses without the recipients knowing about it beforehand.

Caution with tokens sent unprompted

If an unknown token turns up in your wallet with no recognisable occasion, the tax question is usually the smaller problem. Such deliveries are a common lure: the attempt to sell or swap the token leads to a doctored interface or demands an approval that makes your remaining holdings reachable. Leave tokens sent unprompted untouched and check them via a blockchain explorer first.

The element of chance: why a draw changes the calculation

Between the two basic cases lies a constellation that the ministry regulates separately. Many large airdrops work with a random selection among everyone who met the conditions. So not every participant receives coins.

On this, margin number 72 says: where the airdrop is designed so that, alongside a service, chance also decides on the receipt of crypto assets, the attribution link between service and consideration is interrupted or overlaid by the element of chance.

Translated: where chance has a say, the straight line between your conduct and the inflow that Section 22 No. 3 of the Income Tax Act presupposes is missing. That can mean that no other income arises despite a service having been rendered. Whether that holds in your case depends on how the exercise was specifically designed, which is exactly why you should secure the terms of participation while the project page is still online.

Which price to value at, and when zero euros is permissible

Where other income arises, the crypto assets are to be recognised at the market price at the time of acquisition. That is a snapshot, not an average and not a year-end closing price.

Which price source the tax office accepts

Under margin number 43, the price of a trading platform or of a web-based price list may be applied as the market price. The ministry names as examples the Börse Stuttgart Digital Exchange, Kraken, Coinbase and Bitpanda, as well as the price lists of CoinMarketCap and CoinGecko. What matters is that you document the source you choose and do not switch from one transaction to the next depending on which price happens to look more favourable.

The special case: no ascertainable market price

Freshly distributed tokens often have no tradable price at all at the moment of inflow. For that case, margin number 73 contains an express non-objection rule: where no market price can be ascertained at the time of acquisition, no objection is raised if the crypto assets received in the course of an airdrop are recognised at zero euros.

That is the most important practical relief in the whole section. Anyone receiving coins before they are listed anywhere applies a value of zero, and the later rise in value only becomes relevant on sale. The condition, however, is that you can evidence the state of affairs: the time of the inflow, the time of the first listing, a screenshot or an export file. Without that evidence, your assertion later stands against the price list the tax office calls up itself.

The sale afterwards: holding period, acquisition costs and the 1,000 euro threshold

The second moment of taxation arrives when you sell the coins, swap them into Bitcoin or another crypto asset, or pay for something with them. Each of those events is a disposal. Whether it becomes a taxable private disposal transaction is decided by a prior question: was the inflow an acquisition?

Airdrop with a service: an acquisition exists

Margin number 75 is unambiguous here. Where the allocation is made on the basis of a service within the meaning of Section 22 No. 3 of the Income Tax Act, an acquisition also exists. The acquisition costs are to be recognised at the value of the data given up or the action carried out, whereby it may be rebuttably presumed that this value corresponds to the market price of the consideration.

From the inflow onwards, the one-year holding period of Section 23 of the Income Tax Act therefore runs. Sell within a year and the gain is taxable, in other words the difference between the sale proceeds and the acquisition costs applied. Sell after the year has elapsed and the gain remains tax free. The first act of taxation under Section 22 No. 3 is unaffected by that; it already happened on inflow.

The threshold of Section 23 (3) sentence 5 of the Income Tax Act applies on top here: gains from private disposal transactions remain tax free if the total of all gains realised in the calendar year comes to less than 1,000 euros. Up to and including the 2023 assessment period this limit stood at 600 euros. This too is an exemption threshold, not an allowance.

Airdrop without a service: acquisition free of charge

Where the inflow was not consideration, you acquired the coins free of charge. In that case, under the same subsection and Section 23 (1) sentence 3 of the Income Tax Act, the acquisition by the legal predecessor is decisive. For tax purposes you step into the position of whoever acquired the coins before you, together with their acquisition date and acquisition costs.

In the practice of a marketing airdrop those details about the predecessor are next to never ascertainable. That is precisely why the question of the service is not merely a formality at the outset, but determines whether you can present a clean tax base at all when you sell. Anyone without records here ends up negotiating an estimate with the tax office.

Record-keeping obligations: what you have had to document since the 2025 assessment period

The BMF circular of March 6, 2025 contains, for the first time, a section of its own on obligations to cooperate, to keep records and to retain them. Under the application rule in margin number 106, the circular applies from its publication in the Federal Tax Gazette Part I to all open cases. Records that depart from the new requirements are no longer objected to only for assessment periods up to and including 2024. For the current year the new standard applies.

Margin number 103 lists what the tax offices can request. For airdrops there is one point there that follows directly from everything set out above: to be stated are the time of acquisition, the quantity acquired and the nature of the acquisition process, and specifically, in the case of an airdrop, expressly for the purpose of determining whether a service exists, a description of the conditions that were decisive for the allocation of the crypto assets.

The evidence list for every single airdrop

From that requirement a list can be derived which you should draw up on the day you take part, and not in the spring of the following year. The compilation comprises the name of the project and the address of the smart contract, the terms of participation in their wording as a screenshot or saved page, a note of which data or actions were demanded of you, the time of the inflow with the transaction hash, the wallet address used, and the market price together with the source, or the evidence that no price was available at that time.

In addition, margin number 103 requires documentation of the chosen order of use, in other words whether you apply individual identification, the average method or FiFo, and that for the respective wallet. Anyone who has chosen a method once should not switch it from year to year. Software takes the arithmetic off your hands; an overview of tested providers is given by our comparison of crypto tax tools and portfolio trackers. No software, however, can reconstruct the conditions of the airdrop for you once the project page has been taken down.

Where airdrop income ends up in the tax return

Other income from services under Section 22 No. 3 of the Income Tax Act belongs in Annex SO of the income tax return, in the section for services. There you enter the total of the values that accrued; you can set costs against it, such as transaction fees you incurred in collecting the coins.

Private disposal transactions from the later sale likewise belong in Annex SO, but in a different section. Both events stand side by side and concern the same holding at different points in time. A frequent error consists in forgetting the inflow and declaring only the sale, or conversely in recognising the inflow value a second time as a gain although it already forms the acquisition costs.

Losses from private disposal transactions may be offset only against gains from the same type of income, not against your employment income. Something similar applies to losses from services under Section 22 No. 3.

Four mistakes that get expensive with airdrops

The inflow is ignored because nothing was sold. The tax under Section 22 No. 3 arises at the moment of inflow. Anyone waiting until they sell declares the wrong year and risks a correction plus interest.

The terms of participation are not secured. Projects disappear, announcement pages are deleted, channels are closed. Without the conditions you can later show neither that no service was rendered nor that chance had a say.

The 256 euro limit is treated as an allowance. With 260 euros of service income it is not four euros that are taxable, but 260.

The coins are left on a trading platform with no usable export. If you cannot later pull the movements as a file, every review turns into manual work. Anyone taking part in airdrops regularly should use a platform that provides complete transaction overviews as a structured file for download, and should not try the export for the first time in the spring of the following year.

Airdrop tax: what to take away

The rules are more complicated than the picture of a gift that many projects paint. They remain manageable all the same, provided you do three things in this order.

1. Settle the service question for every airdrop and put it in writing. Note on the day you take part what was demanded, and secure the conditions as a screenshot. That single note decides income tax, holding period and acquisition costs. Which trading platform will let you sell the coins at all later is best clarified beforehand, for instance via our exchange comparison.
2. Record the inflow value in the year of the inflow, not in the year of the sale. Apply the market price from a source you use consistently, or document that there was no price yet. A tax tool takes over the valuation and the order of use automatically, see our comparison of tax tools.
3. Move the holdings to where you can evidence them. Put coins you intend to hold for more than a year into a wallet whose keys you control yourself, and document the transfer. Which devices are suitable for that is set out in our hardware wallet comparison.

(As of September 23, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)