3‑225 Meaning of International Shipping 3‑225 Meaning of International Shipping Income, etc.

3‑225 Meaning of International Shipping Income, etc.

(1) The International Shipping Income of a Constituent Entity of an MNE Group for a Fiscal Year is: (a) the Constituent Entity’s International Shipping Income Revenue for the Fiscal Year (see subsection (2)); reduced by: (b) the Constituent Entity’s International Shipping Income Costs for the Fiscal Year (see subsection (3)). (2) The International Shipping Income Revenue of a Constituent Entity of an MNE Group for a Fiscal Year means the revenue obtained by the Constituent Entity for the Fiscal Year from the following activities (each of which is an International Shipping Activity): (a) transporting passengers or cargo by a ship that it operates in international traffic, whether the ship is owned, leased or otherwise at its disposal; (b) transporting passengers or cargo by a ship operated in international traffic under slot‑chartering arrangements; (c) leasing a ship, to be used for transporting passengers or cargo in international traffic, on charter fully equipped, crewed and supplied; (d) leasing a ship on a bareboat charter basis, for transporting passengers or cargo in international traffic, to another Constituent Entity of the MNE Group; (e) participating in a pool, a joint business or an international operating agency for transporting passengers or cargo by a ship in international traffic; (f) if a ship is used for transporting passengers or cargo in international traffic and has been held for use by the Constituent Entity for at least 1 year—selling the ship. (3) The International Shipping Income Costs of a Constituent Entity of an MNE Group for a Fiscal Year means the amount computed in accordance with the following formula: Start formula Direct costs plus open bracket Indirect costs times start fraction Shipping revenue over Total revenue end fraction close bracket end formula where:

direct costs is the total costs incurred by the Constituent Entity for the Fiscal Year that are directly attributable to the Constituent Entity’s performance of International Shipping Activities.

indirect costs is the total costs incurred by the Constituent Entity for the Fiscal Year that are indirectly attributable to the Constituent Entity’s performance of International Shipping Activities.

shipping revenue is the Constituent Entity’s International Shipping Income Revenue for the Fiscal Year.

total revenue is the Constituent Entity’s total revenue for the Fiscal Year.