SCHEDULE H Deductions Allocated To Effectively Connected OMB No. 1545-0126

(Form 1120-F) Income Under Regulations Section 1.861-8

Department of the Treasury © Attach to Form 1120-F.

Internal Revenue Service

Name of corporation Employer identification number

Deductions Directly Allocated and Apportioned to ECI and Non-ECI

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 1120-F. Cat. No. 49679V Schedule H (Form 1120-F) 2007

Part I

©

2007

See separate instructions.

1

2

3

4

5

6

7

8

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

9

Total adjusted deductions on the books of the home office. Combine lines 1 and 2 

10

Interest expense (included in line 3) 

Bad debt expense (included in line 3) 

11

12

13

Total expenses on the books of the home office 

14

Remaining deductions from line 3. Subtract line 6 from line 3 

16

Deductions directly allocable to other non-effectively connected income

booked in the home country 

Deductions directly allocable to non-effectively connected income from subsidiaries

Add lines 8 through 10 

Total of interest expense and bad debt expense. Add lines 4 and 5 

15

Remaining deductions on the books of the home office indirectly allocable under Regulations

section 1.861-8. Subtract line 13 from line 12 

Average exchange rate used to convert allocable deductions to U.S. dollars (see instructions)

Indirect allocation and apportionment of line 16 amount to ECI (attach computation) 

Remaining deductions on the books of the home office allocable under Regulations section

1.861-8. Subtract line 11 from line 7 

Less: Deductions directly allocated to effectively connected income 

Deductions directly allocable to other non-effectively connected income

booked in other countries (including the United States) 

Part II Home Office Deductions Indirectly Allocated and Apportioned to ECI and Non-ECI

17

18

20

21

Deductions directly allocated to ECI from line 13, in U.S. dollars. If stated in foreign currency,

multiply line 13 by line 15 

Total deductions from other non-U.S. locations allocated and apportioned to effectively

connected income 

Total deductions allocated and apportioned to effectively connected income. Add lines 19

and 20 and enter the amount here and on Form 1120F, section II, line 26

b

22 Gross Income Ratio:

Average U.S. assets from Schedule I, line 5, column (d)

Part III Indirect Allocation and Apportionment Methods and Financial Records

23

24 Number of Personnel:

Deductions indirectly allocable under Regulations section 1.861-8. Enter the amount from line

14 in U.S. dollars. If line 14 is stated in functional currency, multiply line 14 by line 15 

25 Other ratio based methods (attach schedule)

19 Total home office deductions allocated to effectively connected income. Add lines 17 and 18 

Note. Enter all amounts in Part I in only U.S. dollars or in only functional currency. If U.S. dollars, check box . Otherwise, specify currency ©

1

2

3

4

5

6

7

8

9

10

11

12

13

14

16

15

17

18

20

21

19

Note. Enter the amounts in Part III, lines 22a, 22b, 23a, 23b, and 25 (if applicable), in U.S. dollars.

a

c

Effectively connected gross income

Worldwide gross income

Divide line 22a by line 22b 

Gross Asset Ratio:

Worldwide assets (if applicable, from Schedule I, line 6b) 

Divide line 23a by line 23b 

a

b

c

a

b

c

Personnel of U.S. trade or business within the United States 

Worldwide personnel of foreign corporation

Divide line 24a by line 24b 

22c

22b

22a

23c

23b

23a

24c

24b

24a

26 Other methods (e.g., time spent analysis) (attach schedule)

%

%

%

Note. Enter the amounts in Part II, lines 16 through 21, in U.S. dollars.

● If one or more methods used are different than in prior year, check box

● If any amount on line 21 is recorded as an interbranch amount on books and records used to prepare Form 1120F, Schedule 

L, include on Part IV, line 36 and check box
Total expenses per books and records used to prepare Form 1120F,

Schedule L 

Schedule H (Form 1120-F) 2007 Page 2

Schedule H (Form 1120-F) 2007

Part III Indirect Allocation and Apportionment Methods and Financial Records (continued)

27a Published or other non-public audited financial statements 

No

b

28

Non-audited financial statements 

Home office management or other departmental cost accounting reports 

Yes

Financial and other records used to identify deductions allocated and apportioned to ECI

Other (e.g., home country regulatory reports) (attach schedule) 

30

Part IV Allocation and Apportionment of Deductions on Books and Records Used to Prepare Form 1120F, Schedule L

b

33a Third party interest expense per books and records 

Interbranch interest expense per books and records 

34 Bad debt expense per books and records 

36

35 Other third party deductions not allocable (attach schedule) 

Interbranch expenses per books not included on line 33b (attach schedule) 

38 Deductions on books and records allocable and apportionable under Regulations section 1.861-8.

Subtract line 37 from line 32 

39a Derivative transaction deductions directly allocated under

section 1.861-8 (from line 38) 

Reconciliation of allocable expenses on books under Reg. 1.861-8 (from line 38)

40

b Other deductions directly allocated and apportioned 

Total expenses directly allocated and apportioned. Add lines

39a and 39b 

41 Deductions on books and records indirectly allocated and

apportioned 

42 Total deductions allocated and apportioned. Add lines 40 and 41.

Column (c) must equal line 38

(b)

Non-ECI Amounts

(a)

ECI Amounts

(c)

Total: Add columns

(a) and (b)

Note. Enter all amounts in Part IV in U.S. dollars.

37 Add lines 33a through 36 

30

32

33b

36

34

38

37

33a

39a

40

41

42

39b

29

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

32 Total deductions per line 30 books and records. Combine lines 30 and 31 

31

35

Note. Line 42, column (a) is the total of the deductions reported on Form 1120F, Section II, lines 12, 13, 14, 16, 17, 19, 20,

21, 22, 23, 24, 25, and 27.