How are staking rewards and airdrops taxed in Israel?

The short answer

The Tax Authority has published no specific position on staking or airdrops, but every rule it has published for coins received (from mining, as salary or as payment) taxes them as income on receipt at fair value, which becomes their cost when sold.

In brief

Specific position: None published for staking or airdrops
Mining: Business income on receipt, at fair value
Coins received as salary: Employment income on receipt, at fair value
Later sale: A further taxable event, on the change in value since receipt
Offsetting a capital loss: Against capital gains only, not against this income

What has the Tax Authority published about coins received?

According to the Tax Authority’s Q&A, a person who receives digital coins in return for mining is liable to income tax on them as business income when they are received, at their fair value at that time. Income Tax Circular 05/2018 also classifies mining income as business income.

An employee who receives a decentralized token such as bitcoin from an employer is taxed on it as employment income when it is received, at its fair value at that time.

A person who receives a digital coin in return for an asset or a service records income at the value of that consideration, and under Circular 05/2018 the same value is also the original price of the coin received. A later sale of the coin is a further taxable event, on the change in its value since it was received.

What about staking and airdrops?

Neither the Tax Authority’s Q&A nor Circular 05/2018 addresses staking, airdrops or the yield on coins deposited with an exchange. In a 2024 report the State Comptroller found that the Tax Authority had neither set nor published a position on taxing financial instruments unique to crypto, such as lending coins for a return, and that the market reads the classification of that return in different ways.

With no specific position, the rules published for the closest cases all point the same way: a coin received is income when it is received, at its fair value, and that value is its original price on its next sale.

How the income is classified, and so the rate it is taxed at, depends on the circumstances, so where the amounts are significant it is worth consulting a tax advisor or accountant.

Can a crypto loss be offset against this income?

No. Under section 92 of the Income Tax Ordinance a capital loss is offset against capital gains, and any remainder carries forward to later years against capital gains only. The wider offset against interest and dividends applies only to a loss on selling a security.

So a loss on selling a digital coin does not reduce the income from rewards received in the same year.

How does Crypto Tax show rewards?

Crypto Tax identifies staking rewards, interest, airdrops, referral rewards and mining that the exchange labels as such, records each as income at its shekel value on the day it was received, and records that same value as the coins’ original price for calculating the capital gain when they are sold.

The classification follows the tax advisor Crypto Tax consulted, not a position the Tax Authority published: interest, Earn and staking rewards are income under section 2(4) of the Ordinance, and airdrops and referral rewards are income under section 2(10), at their market value. Cashback on a purchase is not income but a discount: the coins received are held at zero cost, and their whole value is a capital gain when they are sold.

The income is shown in the report separately from capital gains, with its own CSV file naming each income type’s section, and is not included on Form 1399: it is reported in the annual return, and the rate it is taxed at depends on its classification and on the filer’s other income.

Sources

Last updated: 2026-10-28

This page is general information only and is not tax advice. For your own circumstances, consult a tax advisor or accountant.