How to Report Airdrop Income in Italy: A Complete Tax Guide

Understanding Airdrop Income Taxation in Italy

In Italy, cryptocurrency airdrops – free distributions of tokens to wallet holders – are considered taxable income by the Agenzia delle Entrate (Revenue Agency). Unlike some countries, Italy treats airdrops as “other income” (redditi diversi) at the time of receipt, regardless of whether you sell the tokens. This means you must declare their market value in euros when filing your annual tax return (Modello Redditi PF). Failure to report can result in penalties of 120-240% of unpaid taxes plus interest.

Step-by-Step Guide to Reporting Airdrop Income

1. Record Transaction Details: Note the date of receipt, token name, quantity received, and fair market value in EUR at the exact time of distribution (use exchange rates from reputable platforms like CoinMarketCap).
2. Calculate Taxable Value: Convert the token’s value to euros using the EUR exchange rate at the moment of airdrop receipt. Example: Receiving 100 tokens worth €0.50 each = €50 taxable income.
3. Complete RW Section of Modello Redditi: In Quadro RW, declare foreign-held assets (including crypto wallets). In Quadro RT, report the total airdrop value under “Other Income” (Category RT, Line 9).
4. Apply 26% Capital Gains Tax: The income is taxed at Italy’s standard capital gains rate. For €50 airdrop, €13 is owed (€50 × 0.26).
5. File by Deadline: Submit your tax return electronically by November 30th following the tax year via Fisconline or Entratel.

Common Reporting Mistakes to Avoid

• Ignoring unsold airdrops: Tax applies upon receipt, not sale.
• Using incorrect valuation: Failing to use the EUR value at exact receipt time.
• Mixing with other crypto income: Airdrops require separate reporting from mining/staking.
• Omitting foreign wallet declarations: All non-Italian crypto wallets must be declared in Quadro RW.
• Missing deadlines: Late filings trigger automatic penalties starting at €250.

Frequently Asked Questions (FAQs)

Is airdrop income taxable if I haven’t sold the tokens?

Yes. Italian tax law requires declaration at market value upon receipt. You’ll pay 26% tax immediately, even if tokens aren’t converted to cash.

How do I prove the value of an airdrop?

Use timestamped exchange data (e.g., Binance or Kraken EUR pairs) at the exact hour of receipt. Maintain screenshots and transaction IDs as evidence for 10 years.

Are DeFi airdrops treated differently?

No. All airdrops – whether from DeFi protocols, NFTs, or blockchain forks – follow the same tax rules as standard token distributions.

What if the airdrop has no market value at receipt?

If tokens aren’t tradable upon distribution, declare €0 value. Taxes apply only when they become tradable, using that day’s market price.

Can I deduct transaction fees?

Yes. Gas fees paid to claim the airdrop are deductible from the taxable amount. Document blockchain transaction costs.

Do I need to report airdrops under €1,000?

No exemption exists for small amounts. All airdrops must be reported regardless of value under Italy’s universal income declaration principle.