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Article 6 prescribes the methodology for computing the income or loss of a Constituent Entity for a given fiscal year. Pursuant to Paragraph A, the income or loss is primarily based on the Financial Accounting Net Income or Loss as reported in the entity's financial statements. Importantly, Paragraph B specifies that this figure must be determined before any consolidation adjustments that eliminate intra-group transactions, following Local Financial Accounting Standards. The National Bureau for Revenue will provide further guidance through Executive Regulations to ensure these computations remain consistent with the OECD Pillar Two Model Rules, administrative guidance, and relevant international tax commentaries.

Chapter 2 - Scope and Imposition of the Tax

Article 6 - Computation of Constituent Entity Income or Loss

The Constituent Entity Income or Loss for a Fiscal Year shall be the Financial Accounting Net Income or Loss for that Fiscal Year.
The Financial Accounting Net Income or Loss shall be the Net Constituent Entity Income or Loss for the Fiscal Year before making any consolidation adjustments aimed at eliminating intra-group transactions, in accordance with the Local Financial Accounting Standard of the Constituent Entity.
The Regulations shall prescribe the rules, conditions, controls and other matters necessary for the application of the provisions of this Article in a manner consistent with the Model Rules, administrative guidance, and commentary issued by the Organisation for Economic Co-operation and Development (OECD).