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131 STAT. 2230 PUBLIC LAW 115–97—DEC. 22, 2017 ‘‘(ii) EXPANDED AFFILIATED GROUP.—The term ‘expanded affiliated group’ has the meaning given such term by section 7874(c)(1). ‘‘(5) EXCEPTION FOR CERTAIN AMOUNTS WITH RESPECT TO SERVICES.—Paragraph (1) shall not apply to any amount paid or accrued by a taxpayer for services if— ‘‘(A) such services are services which meet the require- ments for eligibility for use of the services cost method under section 482 (determined without regard to the requirement that the services not contribute significantly to fundamental risks of business success or failure), and ‘‘(B) such amount constitutes the total services cost with no markup component. ‘‘(e) APPLICABLE TAXPAYER.—For purposes of this section— ‘‘(1) IN GENERAL.—The term ‘applicable taxpayer’ means, with respect to any taxable year, a taxpayer— ‘‘(A) which is a corporation other than a regulated investment company, a real estate investment trust, or an S corporation, ‘‘(B) the average annual gross receipts of which for the 3-taxable-year period ending with the preceding taxable year are at least $500,000,000, and ‘‘(C) the base erosion percentage (as determined under subsection (c)(4)) of which for the taxable year is 3 percent (2 percent in the case of a taxpayer described in subsection (b)(3)(B)) or higher. ‘‘(2) GROSS RECEIPTS.— ‘‘(A) SPECIAL RULE FOR FOREIGN PERSONS.—In the case of a foreign person the gross receipts of which are taken into account for purposes of paragraph (1)(B), only gross receipts which are taken into account in determining income which is effectively connected with the conduct of a trade or business within the United States shall be taken into account. In the case of a taxpayer which is a foreign person, the preceding sentence shall not apply to the gross receipts of any United States person which are aggregated with the taxpayer’s gross receipts by reason of paragraph (3). ‘‘(B) OTHER RULES MADE APPLICABLE.—Rules similar to the rules of subparagraphs (B), (C), and (D) of section 448(c)(3) shall apply in determining gross receipts for pur- poses of this section. ‘‘(3) AGGREGATION RULES.—All persons treated as a single employer under subsection (a) of section 52 shall be treated as 1 person for purposes of this subsection and subsection (c)(4), except that in applying section 1563 for purposes of section 52, the exception for foreign corporations under section 1563(b)(2)(C) shall be disregarded. ‘‘(f) FOREIGN PERSON.—For purposes of this section, the term ‘foreign person’ has the meaning given such term by section 6038A(c)(3). ‘‘(g) RELATED PARTY.—For purposes of this section— ‘‘(1) IN GENERAL.—The term ‘related party’ means, with respect to any applicable taxpayer— ‘‘(A) any 25-percent owner of the taxpayer, VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00178 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS