excess intangible income Section 954 is amended by inserting after subsection (e) the following new subsection: (f) Foreign base company excess intangible income For purposes of subsection (a)(4) and this subsection: (1) Foreign base company excess intangible income defined (A) In general The term foreign base company excess intangible income means, with respect to any covered intangible, the excess of— (i) the sum of— (I) gross income from the sale, lease, license, or other disposition of property in which such covered intangible is used directly or indirectly, and (II) gross income from the provision of services related to such covered intangible or in connection with property in which such covered intangible is used directly or indirectly, over (ii) 150 percent of the costs properly allocated and apportioned to the gross income taken into account under clause (i) other than expenses for interest and taxes and any expenses which are not directly allocable to such gross income. (B) Same country income not taken into account If— (i) the sale, lease, license, or other disposition of the property referred to in subparagraph (A)(i)(I) is for use, consumption, or disposition in the country under the laws of which the controlled foreign corporation is created or organized, or (ii) the services referred to in subparagraph (A)(i)(II) are performed in such country, the gross income from such sale, lease, license, or other disposition, or provision of services, shall not be taken into account under subparagraph (A)(i). (2) Exception based on effective foreign income tax rate (A) In general Foreign base company excess intangible income shall not include the applicable percentage of any item of income received by a controlled foreign corporation if the taxpayer establishes to the satisfaction of the Secretary that such income was subject to an effective rate of income tax imposed by a foreign country in excess of 5 percent. (B) Applicable percentage For purposes of subparagraph (A), the term applicable percentage means the