SCHEDULE I 

(Form 1118)

(Rev. December 2021)

Department of the Treasury 

Internal Revenue Service 

Reduction of Foreign Oil and Gas Taxes

▶ Attach to Form 1118. 

▶ Go to www.irs.gov/Form1118 for the latest information.

For calendar year 20 , or other tax year beginning , 20 , and ending , 20 

OMB No. 1545-0123

Name of corporation Employer identification number

Use a separate Schedule I (Form 1118) for each applicable category of income (see instructions).

a Separate Category (Enter code—see instructions.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶

b If code 901j is entered on line a, enter the country code for the sanctioned country (see instructions) . . . . . . . . . . . . . . ▶

c If one of the RBT codes is entered on line a, enter the country code for the treaty country (see instructions) . . . . . . . . . . . . ▶

Report all amounts in U.S. dollars.

Part I Combined Foreign Oil and Gas Income and Taxes

1(a). EIN or Reference ID number

(see instructions)*

1(b). Foreign country or U.S. possession 

(enter two-letter code—use a separate 

line for each) (see instructions)

Gross Foreign Oil and Gas Income From Sources Outside the United States and Its Possessions (see instructions)

2. Gross foreign oil and 

gas extraction income

3. Gross foreign oil 

related income

4. Inclusions under

sections 951(a)(1) and 

951A

5. Other

6. Total 

(add columns 2 through 5) 

A

B

C

D

E

F

Totals (add lines A through F) . . . . . . . . . . . . . . . ▶

*For section 863(b) income, use a single line (see instructions).

Deductions

7. Allocable deductions 8. Apportioned 

deductions

9. Total 

(add columns 7 and 8)

10. Taxable income (column 6 minus 

column 9)

Foreign Oil and Gas Taxes (attach schedule)

11. Paid or accrued 12. Deemed paid 13. Total 

(add columns 11 and 12) 

A

B

C

D

E

F

Totals

For Paperwork Reduction Act Notice, see the Instructions for Form 1118. Cat. No. 10237L Schedule I (Form 1118) (Rev. 12-2021)
Schedule I (Form 1118) (Rev. 12-2021) Page 2 

Part II Reduction Under Section 907(a)

1 Combined foreign oil and gas income. (See the instructions for Part II, line 1, below.) . . . . .

2 Multiply line 1 by the highest rate of tax under section 11(b). (See the instructions for Part II, line 2, below.)

3 Total taxes (from Part I, column 13, “Totals” line) . . . . . . . . . . . . . . . . .

4 Reduction (subtract line 2 from line 3; if zero or less, enter -0-). Enter here and on Schedule G, 

line B, of the corresponding Form 1118 . . . . . . . . . . . . . . . . . . . .

Part III Foreign Oil and Gas Taxes Available for Use in the Current Tax Year

1 Excess section 907(a) limitation. Subtract Schedule I, Part II, line 3, from line 2. If zero or less, 

enter -0- and do not complete the remainder of Part III . . . . . . . . . . . . . . .

2 Enter the sum of any carryover of foreign oil and gas tax to the current year. Attach a schedule

showing the computation in detail . . . . . . . . . . . . . . . . . . . . . .

3 Enter the smaller of lines 1 and 2 here and include on Schedule B, Part II, line 5 . . . . . . .

General Instructions

Section references are to the Internal Revenue Code unless 

otherwise noted.

Who Must File

If the corporation claims a credit for any income taxes paid, 

accrued, or deemed paid during the tax year on combined foreign 

oil and gas income, the amount of such taxes eligible for credit may 

be reduced. See section 907(a) and Regulations section 1.907(a)-1 

for details.

Method of Reporting

Report all amounts in U.S. dollars. If it is necessary to convert from 

foreign currency, attach a statement explaining how the rate was 

determined.

Specific Instructions

Codes at top of page 1. On line a, enter the same separate 

category code as that shown on the Form 1118 to which this 

Schedule I is attached. If applicable, on line b or c, enter the same 

country code as that shown on the Form 1118 to which this 

Schedule I is attached.

Part I

See section 907(c) and underlying regulations for rules on the 

income to include in Part I.

Note: Do not include any dividend or interest income that is passive 

income. See the Instructions for Form 1118 for the definition of 

passive income.

Column 1(a). For information pertaining to the entry of EINs and 

reference ID numbers, see Identifying Numbers in the separate 

instructions for Form 1118. For section 863(b) income, leave column 

1(a) blank.

Column 1(b). Enter the two-letter codes (from the list at 

www.irs.gov/CountryCodes) of all foreign countries and U.S. 

possessions within which income is sourced and/or to which taxes 

were paid, accrued, or deemed paid. For section 863(b) income, 

enter “863(b)” instead of a two-letter code.

Column 2. Enter gross income from sources outside the United 

States and its possessions from the following.

• The extraction (by the corporation or any other person) of minerals 

from oil or gas wells located outside the United States and its 

possessions.

• The sale or exchange of assets used in the trade or business of 

extracting minerals from oil or gas wells located outside the United 

States and its possessions.

See section 907(c)(1).

Column 3. Enter gross income from sources outside the United 

States and its possessions from the following.

• The processing of minerals extracted (by the corporation or any 

other person) from oil or gas wells into their primary products.

• The transportation of such minerals or primary products.

• The distribution or sale of such minerals or primary products.

• The disposition of assets used in the trade or business described 

in the three previous bulleted items.

• The performance of any other related service.

See section 907(c)(2).

Column 4. Enter amounts taxable under section 951(a) or 951A 

(including section 78 gross-up) that are attributable to the controlled 

foreign corporation’s combined foreign oil and gas income.

Column 5. Include the corporation’s distributive share of partnership 

combined foreign oil and gas income. Include in column 5 interest 

income paid by a foreign corporation to the extent the category of 

income of such interest is determined under section 904(d)(3). Do 

not include interest income paid by a foreign subsidiary out of 

foreign oil and gas extraction income of the payor, even if it is not 

passive income.

See section 907(c)(3).

Columns 7 and 8. Enter the deductions allocated and apportioned 

to foreign oil and gas income in the separate category. See the 

regulations under section 861.

Column 10. For each country, subtract column 9 from column 6 

and enter the result in column 10. When totaling the column 10 

amounts, note that a taxable loss from a foreign country offsets 

taxable income from other countries.

Columns 11 and 12. Attach a schedule to show how the foreign 

taxes paid, accrued, or deemed paid with respect to combined 

foreign oil and gas income were figured.

Part II

Line 1. Enter the total from Part I, column 10, minus any recapture 

described in section 907(c)(4).

Line 2. At the time this schedule went to print, the highest rate of 

tax specified under section 11(b) was 21%.

Part III

Line 2. Enter the sum of any carryover of foreign oil and gas tax to 

the current year. Attach a schedule showing the computation in 

detail. Corporations are encouraged to attach a schedule that is 

similar to Schedule K (Form 1118), which is used to report a running 

balance of the corporation’s section 904(c) carryovers. If this 

approach is taken, the amount to be entered on line 2 is the amount 

that corresponds to Schedule K (Form 1118), line 3, column (xiv). 

Please note that special rules apply to the carryback and carryover 

of foreign taxes paid or accrued on combined foreign oil and gas 

income and related taxes. For example, in applying foreign tax 

carryovers from prior tax years, in the case of any tax year that is an 

unused credit year (as defined in section 907(f)) under each of 

sections 907(f) and 904(c), the provisions of section 907(f) are to be 

applied before section 904(c). See section 907(f) and Regulations 

section 1.907(f)-1 for additional information.