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131 STAT. 2219 PUBLIC LAW 115–97—DEC. 22, 2017 (2) ALLOCATION AMONG TAXPAYERS.—Section 482 is amended by adding at the end the following: ‘‘For purposes of this section, the Secretary shall require the valuation of transfers of intangible property (including intangible property transferred with other property or services) on an aggregate basis or the valuation of such a transfer on the basis of the realistic alternatives to such a transfer, if the Secretary deter- mines that such basis is the most reliable means of valuation of such transfers.’’. (c) EFFECTIVE DATE.— (1) IN GENERAL.—The amendments made by this section shall apply to transfers in taxable years beginning after December 31, 2017. (2) NO INFERENCE.—Nothing in the amendment made by subsection (a) shall be construed to create any inference with respect to the application of section 936(h)(3) of the Internal Revenue Code of 1986, or the authority of the Secretary of the Treasury to provide regulations for such application, with respect to taxable years beginning before January 1, 2018. SEC. 14222. CERTAIN RELATED PARTY AMOUNTS PAID OR ACCRUED IN HYBRID TRANSACTIONS OR WITH HYBRID ENTITIES. (a) IN GENERAL.—Part IX of subchapter B of chapter 1 is amended by inserting after section 267 the following: ‘‘SEC. 267A. CERTAIN RELATED PARTY AMOUNTS PAID OR ACCRUED IN HYBRID TRANSACTIONS OR WITH HYBRID ENTITIES. ‘‘(a) IN GENERAL.—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. ‘‘(b) DISQUALIFIED RELATED PARTY AMOUNT.—For purposes of this section— ‘‘(1) DISQUALIFIED RELATED PARTY AMOUNT.—The term ‘dis- qualified related party amount’ means any interest or royalty paid or accrued to a related party to the extent that— ‘‘(A) such amount is not included in the income of such related party under the tax law of the country of which such related party is a resident for tax purposes or is subject to tax, or ‘‘(B) such related party is allowed a deduction with respect to such amount under the tax law of such country. 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). ‘‘(2) RELATED PARTY.—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. ‘‘(c) HYBRID TRANSACTION.—For purposes of this section, the term ‘hybrid transaction’ means any transaction, series of trans- actions, 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. ‘‘(d) HYBRID ENTITY.—For purposes of this section, the term ‘hybrid entity’ means any entity which is either— 26 USC 267A. 26 USC 963 note. 26 USC 367 note. 26 USC 482. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00167 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS