regard to such amount, and (C) the foreign corporation shall be allowed a deduction (for the taxable year referred to in subparagraph (A)) equal to the deemed expenses with respect to such amount. (2) Specified amount For purposes of this subsection— (A) In general The term specified amount means any amount which is, with respect to the payor, allowable as a deduction or includible in costs of goods sold, inventory, or the basis of a depreciable or amortizable asset. (B) Exceptions The term specified amount shall not include— (i) interest, (ii) any amount paid or incurred for the acquisition of any security described in section 475(c)(2) (determined without regard to the last sentence thereof) or any commodity described in section 475(e)(2), (iii) except as provided in subparagraph (C), any amount with respect to which tax is imposed under section 881(a), and (iv) in the case of a payor which has elected to use a services cost method for purposes of section 482, any amount paid or incurred for services if such amount is the total services cost with no markup. (C) Amounts not treated as effectively connected to extent of gross-basis tax Subparagraph (B)(iii) shall only apply to so much of any specified amount as bears the proportion to such amount as— (i) the rate of tax imposed under section 881(a) with respect to such amount, bears to (ii) 30 percent. (3) Deemed expenses (A) In general The deemed expenses with respect to any specified amount received by a foreign corporation during any reporting year is the amount of expenses such that the net income ratio of such foreign corporation with respect to such amount (taking into account only such specified amount and such deemed expenses) is equal to the net income ratio of the international financial reporting group determined for such reporting year with respect to the product line to which the specified amount relates. (B) Net income ratio For purposes of this paragraph, the term net income ratio means the ratio of— (i) net income determined without regard to