This paper presents the theoretical system-level performance of multiuser multiple-input and multiple-output (MU-MIMO) Tomlinson-Harashima precoding (THP) with user scheduling. In our performance evaluation, proportional fairness (PF), which makes a reasonable compromise between fairness among users and the benefit of multiuser diversity, is implemented as a user scheduling technique, and the effect of modulo loss resulting from THP modulo operation at the receiver is taken into account using mod-Λ channel-based analysis, which provides accurate theoretical performance. Moreover, considering the application to the PF metric, the performance of the mod-Λ channel-based PF metric is compared with that of the traditional Shannon-Hartley theorem-based metric.