Payments, Foreign Exchange & Settlement in the United States

Full guide · Source-checked research100% of statements checked against a source127 checked against an official source2 checked against a secondary sourceChecked 2026-10-19Not yet professionally reviewed

• Fixed, determinable, annual or periodical (FDAP) income from US sources paid to a foreign person, such as interest, dividends, rents and royalties, is taxed at 30% or a lower treaty rate, with no deductions or netting allowed.

  Federal. Usually collected by withholding at source. A reduced rate or exemption may apply under the Internal Revenue Code or a tax treaty.Internal Revenue Service (IRS) · checked 2026-10-18

• Withholding agents report tax withheld on US-source income paid to foreign persons on Form 1042, an annual withholding tax return.

  Federal.Internal Revenue Service (IRS) · checked 2026-10-18

• Dividends paid by a US company to a foreign shareholder are FDAP income subject to 30% US tax, or a lower treaty rate, usually collected by withholding.

  Federal. Relevant to profit repatriation from a US subsidiary.Internal Revenue Service (IRS) · checked 2026-10-18

• The Office of Foreign Assets Control (OFAC), part of the US Treasury, administers and enforces US economic and trade sanctions, using asset blocking and trade restrictions against targeted countries, regimes and persons.

  Federal. Programmes include Russia-related, Iran, North Korea, Cuba, Venezuela-related, counter-narcotics and cyber-related sanctions.US Department of the Treasury, Office of Foreign Assets Control · checked 2026-10-18

• Under OFAC's 50 percent rule, entities owned 50 percent or more in the aggregate, directly or indirectly, by one or more blocked persons are themselves treated as blocked, even if not named on the sanctions list.

  Federal; OFAC programmes. Indirect ownership through other entities counts. Control without majority ownership is not captured by the rule but can still create risk.US Department of the Treasury, Office of Foreign Assets Control · checked 2026-10-18

• Any person who physically transports, mails or ships currency or other monetary instruments totalling more than 10,000 US dollars at one time into or out of the United States must report it.

  Federal, 31 CFR 1010.340(a). A reporting duty, not an approval requirement.Office of the Federal Register (eCFR) · checked 2026-10-19

• A US person, including a financial institution, that holds blocked property under OFAC sanctions must report it to OFAC within 10 business days of the property becoming blocked, and file an annual report of blocked property held at 30 June by 30 September.

  Federal, 31 CFR 501.603. In practice a US bank that blocks a payment will freeze the funds and report them, so a payment touching a sanctioned party can be held indefinitely.Office of the Federal Register (eCFR) · checked 2026-10-19

Read the full guide: Tax, accounting and reporting · Banking, payments and repatriation · Anti-bribery, sanctions and corporate compliance