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.
26 U.S. Code § 267A - Certain related party amounts paid or accrued in hybrid transactions or with hybrid entities
(a) In general
(b) Disqualified related party amountFor purposes of this section—
(1) Disqualified related party amountThe term “disqualified related party amount” means any interest or royalty paid or accrued to a related party to the extent that—
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).
(c) Hybrid transaction
(d) Hybrid entityFor purposes of this section, the term “hybrid entity” means any entity which is either—
treated as fiscally transparent for purposes of this chapter but not so treated for purposes of the tax law of the foreign country of which the entity is resident for tax purposes or is subject to tax, or
(e) RegulationsThe 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—
rules for treating a tax preference as an exclusion from income for purposes of applying subsection (b)(1) if such tax preference has the effect of reducing the generally applicable statutory rate by 25 percent or more,
rules for determining the tax residence of a foreign entity if the entity is otherwise considered a resident of more than one country or of no country,
(7) exceptions from subsection (a) with respect to—
other cases which the Secretary determines do not present a risk of eroding the Federal tax base,
 So in original. Probably should be followed by “and”.