Form SCH H Form 1120-F SCH H Form 1120-F Deductions Allocated to Effectively Connected Income Und

SCHEDULE H
(Form 1120-F)

Deductions Allocated To Effectively Connected
Income Under Regulations Section 1.861-8

2011

Attach to Form 1120-F.
See separate instructions.

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Department of the Treasury
Internal Revenue Service
Name of corporation

Part I

OMB No. 1545-0126

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Employer identification number

Home Office Deductible Expenses Definitely Related Solely to ECI or Non-ECI
.

Note. Enter all amounts on lines 1a through 13 in only U.S. dollars or in only functional currency. If U.S. dollars, check box
Otherwise, specify currency ▶

1a Total expenses on the books of the home office . . . . . . . . . .
b Check the applicable box below to indicate the accounting convention used to
compute the amount on line 1a:
U.S. GAAP
IFRS

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5
6
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10
11
12

Home Country GAAP
Other (specify) ▶

Adjustments for U.S. tax principles (attach schedule - see instructions) . .
2
Total deductible expenses on the books of the home office. Combine lines 1a and 2 . . . . . .
Interest expense included on line 3 . . . . . . . . . . . . . .
4
Bad debt expense included on line 3 . . . . . . . . . . . . . .
5
Total of interest expense and bad debt expense. Add lines 4 and 5 . . . . . . . . . . . .
Remaining deductible expenses to be allocated and apportioned between ECI and non-ECI. Subtract line 6 from line 3
Deductible expenses definitely related solely to non-ECI from subsidiaries .
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9
Deductible expenses definitely related solely to other non-ECI booked in the home country
Deductible expenses definitely related solely to other non-ECI booked in other
countries (including the United States) . . . . . . . . . . . . .
10
Deductible expenses definitely related solely to ECI . . . . . . . . .
11
Total deductible expenses definitely related solely to ECI or non-ECI. Add lines 8 through 11 . . .

Part II
13

1a

6
7

12

Home Office Deductible Expenses Allocated and Apportioned to ECI

Note. Enter the amounts on lines 15 through 20 in U.S. dollars.
Remaining deductible expenses on the books of the home office not definitely related solely to ECI or
non-ECI. Subtract line 12 from line 7 . . . . . . . . . . . . . . . . . . . . . .

14
15
16

Average exchange rate used to convert amounts to U.S. dollars (see instructions) . . . . . . .
Enter the amount from line 13. If line 13 is stated in functional currency, divide line 13 by line 14 . .
Remaining home office deductible expenses on line 15 allocated and apportioned under Regulations
section 1.861-8 to ECI (attach computation) . . . . . . . . . . . . . . . . . . .

17
18
19
20

Enter the amount from line 11. If line 11 is stated in functional currency, divide line 11 by line 14 .
Total home office deductible expenses allocated and apportioned to ECI. Add lines 16 and 17 . .
Total deductible expenses from other non-U.S. locations allocated and apportioned to ECI . . .
Total deductible expenses allocated and apportioned to ECI. Add lines 18 and 19 and enter
amount here and on Form 1120-F, Section II, line 26 . . . . . . . . . . . . . . .

Part III

3

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19
20

Allocation and Apportionment Methods and Financial Records Used to Complete Parts I and II

Note. Enter the amounts in Part III, lines 21a, 21b, 22a, and 22b in U.S. dollars.
• If one or more methods used are different than in prior year, check box . . . . . . . . . . . . . . . . . .
• If any amount on line 20 is recorded as an interbranch amount on books and records used to prepare Form 1120-F,
Schedule L, include the amount on Part IV, line 35 and check this box . . . . . . . . . . . . . . . . . .
21

Gross income ratio:
21a
a Gross ECI
. . . . . . . . . . . . . . . . . . . . . .
b Worldwide gross income . . . . . . . . . . . . . . . . . .
21b
c Divide line 21a by line 21b . . . . . . . . . . . . . . . . . . . . . . . . .
21c
22
Asset ratio:
a Average U.S. assets from Schedule I, line 5, column (d)
. . . . . . .
22a
b Worldwide assets (if applicable, from Schedule I, line 6b) . . . . . . .
22b
c Divide line 22a by line 22b . . . . . . . . . . . . . . . . . . . . . . . . .
22c
23
Number of personnel ratio:
a Personnel of U.S. trade or business . . . . . . . . . . . . . .
23a
23b
b Worldwide personnel . . . . . . . . . . . . . . . . . . .
c Divide line 23a by line 23b . . . . . . . . . . . . . . . . . . . . . . . . .
23c
24
Did the corporation use any ratio-based methods (other than those indicated on lines 21 through 23 above) in
Parts I and II? If “Yes,” attach schedule (see instructions) . . . . . . . . . . . . . . . . . .
25
Did the corporation use any other methods (e.g., time-spent analysis or estimates) in Parts I and II? If “Yes,”
attach schedule (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . .
For Paperwork Reduction Act Notice, see the Instructions for Form 1120-F.

Cat. No. 49679V

%

%

Yes

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No

Schedule H (Form 1120-F) 2011

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Schedule H (Form 1120-F) 2011

Part III

Allocation and Apportionment Methods and Financial Records Used to Complete
Parts I and II (continued)
Note. Indicate whether the corporation used any of the following financial and other records in Parts I and II
to identify deductible expenses allocated and apportioned to ECI.
Yes No

26a
b
27
28

Published or other non-public audited financial statements . . . .
Non-audited financial statements . . . . . . . . . . . . .
Home office management or other departmental cost accounting reports
Other (e.g., home country regulatory reports) (attach schedule) . . .

Part IV
29

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29

30

Adjustments for U.S. tax principles (attach schedule – see instructions)

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30

31

Total deductible expenses. Combine lines 29 and 30

32a

Third-party interest expense included on line 31 .

b Interbranch interest expense included on line 31 .

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32a

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32b

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31

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36

Add lines 32a through 35

37

Deductible expenses on books and records allocated and apportioned to ECI or non-ECI under
Regulations section 1.861-8. Subtract line 36 from line 31 . . . . . . . . . . . . . . .

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Reconciliation of allocation and apportionment of deductible
expenses to ECI and non-ECI on books and records under
Regulations section 1.861-8 (from line 37)

38a

b Other deductible expenses definitely related to ECI or non-ECI
(from line 37) . . . . . . . . . . . . . . . . . .

38b

41

Total deductible expenses definitely related to ECI or non-ECI.
Add lines 38a and 38b . . . . . . . . . . . . . .

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(a)
ECI Amounts

Derivative transaction deductible expenses definitely related to
ECI or non-ECI under Regulations section 1.861-8 (from line 37)

40

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35

36

39

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34

Interbranch expenses per books and records included on line 31 and not
included on line 32b (attach schedule) . . . . . . . . . . . . .

38a

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33

Bad debt expense included on line 31 . . . . . . . . . . . . .
Other third-party deductible expenses not allocated or apportioned to ECI and
non-ECI under Regulations section 1.861-8 included on line 31 (attach
schedule) . . . . . . . . . . . . . . . . . . . . . . .

35

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Allocation and Apportionment of Expenses on Books and Records Used to Prepare Form 1120-F, Schedule L
Note. Enter all amounts in Part IV in U.S. dollars.

Total expenses per books and records used to prepare Form 1120-F,
Schedule L . . . . . . . . . . . . . . . . . . . . . .

33
34

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37

(b)
Non-ECI Amounts

(c)
Total: Add columns
(a) and (b)

39

Other deductible expenses on books and records not definitely
related to ECI or non-ECI that are allocated and apportioned to
ECI and non-ECI (from line 37) . . . . . . . . . . . .

40
Total deductible expenses on books and records allocated and
apportioned to ECI and non-ECI. Add lines 39 and 40. Column (c)
must equal line 37 . . . . . . . . . . . . . . . .
41
Note. Line 41, column (a) is the total of the deductions reported on Form 1120-F, Section II, lines 12, 13, 14, 16, 17, 19 through
25, and 27.
Schedule H (Form 1120-F) 2011