In March 2014, the Obama Administration (the Administration) released its fiscal year 2015 Budget proposals (the Budget). In addition to the transfer pricing rules the earnings stripping rules also apply to transactions with foreign related parties or debt guaranteed by a foreign related party. Under these rules if the taxpayer’s debt to equity ratio exceeds 1.5 to 1 the interest deduction is restricted to 50% of the adjusted taxable income. The disallowed interest may be carried forward for three years. Proposals in the 2015 budget would introduce an interest restriction for an entity that is a member of a group filing consolidated financial statements and would limit the US expenses deduction to the US member’s interest income plus its proportionate share of the group’s net interest expense computed under US tax principles.