No deduction shall be allowed under this chapter for any disqualified related party amount paid or accrued pursuant to a hybrid transaction or by, or to, a hybrid entity.
For purposes of this section-
The term "disqualified related party amount" means any interest or royalty paid or accrued to a related party to the extent that-
Such term shall not include any payment to the extent such payment is included in the gross income of a United States shareholder under section 951(a).
The term "related party" means a related person as defined in section 954(d)(3), except that such section shall be applied with respect to the person making the payment described in paragraph (1) in lieu of the controlled foreign corporation otherwise referred to in such section.
For purposes of this section, the term "hybrid transaction" means any transaction, series of transactions, agreement, or instrument one or more payments with respect to which are treated as interest or royalties for purposes of this chapter and which are not so treated for purposes the tax law of the foreign country of which the recipient of such payment is resident for tax purposes or is subject to tax.
For purposes of this section, the term "hybrid entity" means any entity which is either-
The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance providing for-
1 So in original. Probably should be followed by "and".
26 U.S.C. § 267A
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE Pub. L. 115-97, §14222(c), Dec. 22, 2017, 131 Stat. 2220, provided that: "The amendments made by this section [enacting this section] shall apply to taxable years beginning after December 31, 2017."
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- shareholder
- The term "shareholder" includes a member in an association, joint-stock company, or insurance company.
- transaction
- The term "transaction" includes a series of transactions.