UNITED STATES OF AMERICA

Source: IMF, International Financial Statistics, May 2021.

• The Federal Reserve System (www.federalreserve.gov) is a network of 12 regional Federal Reserve Banks, headed by the Washington-based Board of Governors.

Bank supervision

• The Federal Reserve supervises Edge Act banks (banks permitted to establish subsidiaries outside of their home state in order to carry out international business transactions), the US branches of foreign banks and the foreign activities of US banks. It also supervises state-chartered member banks and US bank holding companies.
• The US Treasury Office of the Comptroller of the Currency (www.occ.gov) supervises national banks.
• The Federal Deposit Insurance Corporation (www.fdic.gov) supervises banks that do not hold accounts with the Fed.

• Lifting fees are applied on payments between resident and non-resident bank accounts.

• Credit transfers are used by companies to pay salaries and suppliers, to make tax payments and for pensions, social security and treasury transfers.
• High-value and urgent credit transfers, known as wire payments, can be settled on a same-day basis via Fedwire (domestic USD payments) or via CHIPS (cross-border USD payments).
• Low-value credit transfers can be settled via the ACH with ACH credits. These should be initiated one day prior to the settlement date. FedACH's SameDay Service enables the settlement of ACH transactions of up to
  USD 100,000 on a same-day basis. As of March 18, 2022, the SameDay ACH limit will be increased to USD 1 million.
• In 2019, the volume and value of ACH credits rose 8.3% and 8.4% respectively on 2018 figures, to 13 billion and USD 44,292 billion.
• The Real-Time Payments (RTP) system enables financial institutions to offer real-time fund transfers 24/7/365. The RTP network currently has 106 participants.

• Direct debits are used for regular payments, such as utility bills.
• ACH debits are used to process direct debits. These should be initiated one day prior to the settlement date. FedACH's SameDay Service enables the settlement of ACH debit transactions on a same-day basis.
• In 2019, the volume and value of ACH debits rose 5.9% and 9.9% respectively on 2018 figures, to 18 billion and USD 25,586 billion.

• Cheque use is in steady decline as electronic payment methods become the preferred method of payment for consumers and companies.
• In 2019, the volume and value of cheques declined 7.1% and 3.1% respectively on 2018 figures, to 13 billion and USD 25,834 billion.
• Deposited cheques drawn at the same bank are settled on a same-day basis.
• The majority of interbank cheques are truncated and processed in electronic form. Most of these interbank cheques are cleared through direct exchange, regional or local cheque clearing houses and correspondent bank networks. The remainder are cleared through the Federal Reserve Banks.

• Card payments are increasingly popular, especially for retail transactions.
• There were 325 million debit cards and 1,084.9 million credit cards in circulation at the end of 2019.
• In 2019, the volume and value of debit card payments grew 6.9% and 10.1% respectively on 2018 figures, to 78 billion and USD 3,026 billion.
• In 2019, the volume and value of credit card payments grew 7.3% and 8.8% respectively on 2018 figures, to 44 billion and USD 3,964 billion.
• Visa and MasterCard-branded cards are the most widely issued.
• American Express and Diners Club credit cards are also available.
• Proprietary cards, such as those issued by retail stores and oil companies, are also widely used.
• The roll out and adoption of contactless cards payments in the US has been slow. However, Covid 19 has seen an increased adoption of contactless payments by both consumers and merchants alike.
• Card payments are typically processed by their respective international card scheme.
• The majority of credit and debit cards in the USA are EMV-compliant. Approximately one billion EMV cards were in circulation at the end of 2019.

• There are approximately 425,000 ATMs in the USA.
• There are approximately 12.7 million POS terminals in the USA.
• National ATM networks are interoperable.

• Pre-paid, stored-value cards are the dominant electronic wallet schemes in the USA. These schemes usually come in the form of private label cards (40% of total usage), Electronic Benefits Transfer (EBT – 16% of total usage) cards and general purpose cards (43.7% of total usage).
• In 2019, there were seven billion e-money payments (pre-paid debit card), up from six billion transactions in 2018. Value of transactions rose from
  USD 190 billion in 2018, to USD 221 billion in 2019.
• Payments are settled internally by banks or by the individual card schemes.
• Mobile payment schemes such as Google Pay, Samsung Pay, Venmo, Zelle and Apple Pay are available; according to research by McKinsey, penetration of digital payments in the US reached 78% in 2020.

BNP Paribas, including Bank of the West (BOW), is a leader in traditional trade finance and state-of-the-art working capital solutions in the USA. The bank offers an extensive network, and comprehensive product range, including integrated cash and trade solutions, covering conventional trade, specific products such as ABL, ECR, Swift loans and working capital solution. These are key differentiators compared with regional competition. For this, corporations headquartered in, or operating in the USA can rely on 25 dedicated trade finance managers supported by experienced back officers.

• The USA has signed FTAs with 20 countries, including Australia, Bahrain, Chile, Colombia, Israel, Jordan, Morocco, Oman, Panama, Peru, Singapore and South Korea.

Source: IMF, International Financial Statistics, May 2021.

• Import licences are required when importing animals, plants, dairy products and alcoholic beverages.

• Tariffs are generally set at low rates, except for textiles, clothing, leather, footwear, tobacco and beverages, which are subject to higher taxes.
• Tariffs of between 4% and 5% are generally set on industrial imports.
• Anti-dumping and countervailing duty laws are rigorously enforced.
• In 2018, the US government imposed a 25% tariff on imports of steel and a 10% tariff on aluminium. A number of countries have been granted temporary exemptions.
• In 2018, tariffs were introduced on imported washing machines and solar panels. A 20% tariff on the first 1.2 million imported residential washing machines in the first year and a 50% tariff on additional machines. The tariffs will fall to 16% and 40% respectively in the third year. A 30% tariff will be imposed on imported solar panels in the first year, with the tariffs dropping to 15% by the fourth year.
• In 2018, 25% duties were imposed on Chinese goods ranging from water boilers and lathes to industrial robots and electric cars.

• None.

• None.

• The USA prohibits imports from a number of countries in line with international sanctions.

• Licences from the Department of Agriculture from are required for exports of livestock and dairy products.
• Licences from the Department of Commerce from are required for exports of software.

• None.

• None.

• The Export-Import Bank of the United States (Ex-Im Bank)  the USA’s national export credit agency, provides state-supported credit insurance and financing.
• Export credit insurance is also available from the Foreign Credit Insurance Association (FCIA).
• Export credit insurance and financing are available from private constitutions.

• The USA prohibits exports to a number of countries in line with international sanctions.

• Exchange controls are administered by the US Treasury.
• Any capital controlled, whether directly or indirectly, by the government or public authorities in restricted nations may only be repatriated with a licence issued by the US Treasury.
• Restrictions apply to inward direct investment into a small number of specified industries.
• Individuals importing or exporting in excess of USD 10,000 or its equivalent in cash, traveller's cheques, money orders or negotiable bearer securities must notify the customs authorities.

• There are specific regimes in the US tax legislation that deal with the taxation of derivatives and other financial instruments. These regimes apply to determine the source, timing and character of any income or loss recognised as a result of the transaction or series of transactions forming the instrument. These rules can differ depending on whether the instrument is part of a hedging transaction or series of transactions.
• In addition, the US withholding tax rules can apply to payments made pursuant to the instrument(s).
• There also are a series of anti-abuse rules relating to the taxation of financial instruments both for related-party and third-party transactions. These rules focus primarily on abuses relating to income deferral, loss acceleration, and changes to the character of gain or loss.
• Finally, there are specific rules for certain financial instruments and transactions under the Subpart F rules and for the purpose of determining the amount of foreign taxes creditable in the USA. 

• Interest income is generally includible in the determination of taxable income.

• The USA has particular rules regarding the taxation of income, deductions, and gains and losses relating to foreign currency transactions. These rules govern the timing and character of income, expense, gain, or loss to be recognised on such transactions. The rules differ depending on whether the transaction relates to a hedge of foreign exchange risk or satisfies an exclusion from the subpart F rules for business needs. These rules apply both to the calculation of the US tax liability of an entity or person subject to US taxation and to determining the income of foreign subsidiaries of US companies for the purposes of the US Subpart F and foreign tax credit regimes. 

• Not applicable

• Capital gains earned by a domestic company are taxed at ordinary corporate tax rates. Foreign companies are generally exempt from tax on capital gains, unless the income is taxable as Fixed, Determinable, Annual, or Periodical (FDAP) income or is considered to be connected with a US trade or business. Gains on the sale of stock in a US real property holding company or on the sale of a US real property interest by a foreign company are treated as income that is effectively connected with a US trade or business. Capital gains recognised by a foreign company may also be taxable as Subpart F income.
• Capital losses may only be used to offset capital gains, not ordinary income. A company's excess capital losses can be carried back three years and forward for five years to offset capital gains in such other years. The amount of capital loss carried back, however, is limited to an amount that does not cause or increase a net operating loss in the carry-back year.

• The gross amount of dividends paid by a domestic corporation to a foreign corporation generally is subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or the income is ECI. Dividends paid by a narrow class of “grandfathered 80/20 companies (a domestic corporation that derives at least 80% of its income for the three-year testing period from active foreign business (its own or subsidiaries)) existing before 2011 are eligible for relief from gross-basis tax in the hands of foreign corporations.
• Dividends received by a foreign corporation from another foreign corporation out of the latter’s earnings attributable to ECI are not subject to US withholding tax; the branch profits tax serves as a substitute for shareholder-level taxation of such earnings.
• The gross amount of interest received by a foreign corporation from US sources generally is subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or statutory exemption applies. Interest that is ECI and certain interest on portfolio debt obligations, short-term obligations, bank deposits, bonds issued by state or local governments, and debts of grandfathered 80/20 companies generally may be exempt from withholding tax.
• Royalties received by a foreign corporation for the use of property in the US are subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or the income is ECI.
• There generally is only a tax on fees for personal services, including technical services if the services are performed within the US. If the services are performed in the US, such fees typically would be ECI.
• The US imposes a branch profits tax.
• Any other income, gain or profit characterized as “fixed or determinable, annual or periodic” (FDAP) is subject to a 30% withholding tax, unless the rate is reduced under a tax treaty or the income is ECI. A nonfinal tax also must be withheld on proceeds from the disposition of US real property interests (10%) and by partnerships on their ECI allocable to foreign corporate partners (35%).

• The USA has exchange of information relationships with 88 jurisdictions through 60 double tax treaties and 34 TIEAs.

• For tax years beginning after December 31, 2017, the deduction for “business interest” (interest allocable to a trade or business that is not investment interest) generally is limited to (1) business interest income, plus (2) generally 30% (or 50% for 2019 and 2020, as amended by the CARES Act) of the taxpayer’s adjusted taxable income (ATI), plus (3) the taxpayer’s “floor plan financing interest expense”. Additionally, taxpayers generally may elect to use their adjusted income for the last taxable year beginning in 2019 to calculate the taxpayer’s IRC section 163(j) limitation for taxable year 2020. “Adjusted taxable income” is computed without regard to any: (1) item of income, gain, deduction, or loss that is not allocable to the trade or business; (2) business interest income or expense; (3) the 20% deduction for certain pass-through income; (4) the NOL deduction; and (5) for taxable years beginning before January 1, 2022, any depreciation, amortization, or depletion; and (6) such other adjustments as provided by the Secretary of the Treasury. Business interest that is not allowed as a deduction may be carried forward indefinitely. There are some exceptions to the rules, including an exception for certain small businesses whose average annual gross receipts for the three-year period ending with the prior tax year do not exceed USD 26 million (with adjustments for inflation for taxable years beginning after December 31, 2019).
• The limitation generally applies at the taxpayer level. In the case of a group of affiliated corporations that file a consolidated return, the limitation applies at the consolidated tax return filing level. Special rules apply to partnership.
• Disallowed interest that is not currently deductible may be carried forward and deducted in future years if certain conditions are satisfied.

• The tax authorities may adjust income in related party transactions that are not at arm’s length. Detailed regulations prescribe the scope, specific methodologies, and principles. Documentation is required. APAs, both bilateral and unilateral, may be negotiated.
• Annual country-by-country reporting is required by US entities that are the ultimate parent entity of a multinational enterprise group with annual revenue of USD 850 million or more. .

• Documentary stamp taxes may be imposed at the state level. Stamp taxes also may be imposed on such items as alcohol and tobacco.

• There are no specific tax rules for cash pooling arrangements. However, such arrangements could be subject to the Subpart F, the foreign tax credit rules, the foreign exchange rules, the withholding tax rules and all other generally applicable US tax rules, as discussed above.

• There is no specific federal financial transactions tax. Certain US states impose a stamp duty/tax on certain financial transactions or financial institutions. These duties or taxes generally are imposed at very low rates and are imposed only on certain transactions, issuances or institutions.

All tax information supplied by Deloitte Touche Tohmatsu and Deloitte Highlight 2021 (www.deloitte.com).