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—
(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 such tax law but not so treated for purposes of this chapter.
(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 the application of this section to branches or domestic entities,
rules for treating certain structured transactions as subject to subsection (a),
(7) exceptions from subsection (a) with respect to—
requirements for record keeping and information reporting in addition to any requirements imposed by section 6038A.