June 22 (Cointime) - Crypto and NFT airdrops are events organized by crypto startups to increase their popularity and attract a community around their products or services. Users are rewarded for completing various tasks such as following the project on different channels, sharing a post, referring a friend, or registering on an airdrop page.

After the airdrop, users are rewarded based on the number of tasks they completed. However, the taxation of crypto airdrops varies by country, with some countries having little to no taxes for crypto airdrops and gains, while others have set taxes for the rewards.

Several countries, including Hong Kong and Malaysia, offer tax exemptions for cryptocurrency transactions in real estate and luxury cars industries. While some countries exempt individual investors from crypto taxes, businesses may still be required to pay income tax. In the US, UK, Australia, Canada, Andorra, India, and the Netherlands, crypto transactions are generally classified as income and taxed accordingly. Both income tax and capital gains tax may apply to crypto transactions, including airdrops.

If you receive cryptocurrency worth $100 during an airdrop, you may have to pay income tax based on the regulations of your country. If you sell $50 worth of the received tokens and make a profit, you will also have to report and pay capital gains tax. Crypto airdrop rewards are generally classified as income and taxable, but some countries like Germany, Portugal, Singapore, Malta, Switzerland, and Malaysia are crypto-tax-free. However, additional taxes may apply depending on how you plan to use the tokens or NFTs you received.