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FDAP income

Fixed or periodic US-source income such as dividends, interest and royalties, withheld on at 30% or a treaty rate when paid to a foreign person.

The short answer, then the detailChecked September 2026

The detail

What it means in practice.

FDAP stands for fixed, determinable, annual or periodical. US-source passive income of this kind paid to a foreign person is taxed by withholding at 30%, unless a treaty lowers the rate. Royalties from a platform, dividends from a US company and interest are the usual examples. Payments for services performed abroad aren't US-source, so they aren't withheld on.

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