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The Proposed Regulations closely follow the previous administrative guidance provided under Notice 2018-28, provide additional guidance related to the mechanics of determining the interest expense limitation, and clarify the application of Section 163(j) to consolidated groups, partnerships, and CFCs. The Proposed Regulations, however, reserve on the interactions between Section 163(j) and the BEAT provisions under Section 59A. Such guidance is anticipated in forthcoming regulatory guidance.

Taxpayers should review and assess the impact of the provisions in the Proposed Regulations, and consider commenting on issues that Treasury should address before issuing final Section 163(j) guidance.

The above-mentioned highlights are not an exhaustive list of the provisions in the Proposed Regulations. Stay tuned for our in-depth Insight to be published in the coming days. In addition, we will discuss the Section 163(j) guidance in an upcoming Tax Reform Readiness series webcast.


For further queries, please contact Tom Patten or speak to your usual PwC adviser.