with respect to taxable years beginning before January 1, 2018. 14223. 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: 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 disqualified 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 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. (d) Hybrid entity For purposes of this section, the term hybrid entity means any