The proposed legislation includes an amendment to section 102 of the Tax Code that clarifies some aspects of tax computing regarding income obtained through trusts.
Starting from taxable year 2017, it is proposed that for purposes of income tax, trust companies shall report to the settlor/beneficiaries, all the items of income, costs and expenses obtained by the trust, pointing out the tax characterizations of each item of income.
In this way, the settlor/beneficiaries shall include in their income tax return every item reported by the trust company at the end of each taxable year.
Currently, section 102 of the Tax Code establishes that the settlor or beneficiaries shall include in its income tax return the accumulated profit or loss obtained by the trust that is certified at December 31 by the trust company.
It shall be noted that trust companies are regulated by special commerce law provisions and by the Finance Superintendence.