Article 33p. 33

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

(3) Income received by estates of deceased persons

during the period of administration or settlement of

the estate; and

(4) Income which, in the discretion of the fiduciary,

may be either distributed to the beneficiaries or

accumulated.

(B) Exception. - The tax imposed by this Title shall not

apply to employee's trust which forms part of a pension,

stock bonus or profit-sharing plan of an employer for the

benefit of some or all of his employees (1) if contributions

are made to the trust by such employer, or employees, or

both for the purpose of distributing to such employees

the earnings and principal of the fund accumulated by

the trust in accordance with such plan, and (2) if under

the trust instrument it is impossible, at any time prior to

the satisfaction of all liabilities with respect to employees

under the trust, for any part of the corpus or income to be

(within the taxable year or thereafter) used for, or diverted

to, purposes other than for the exclusive benefit of his

employees:

Provided,

That

any

amount

actually

distributed

to

any

employee or distributee shall be

taxable to him in the year in which so distributed to the

extent that it exceeds the amount contributed by such

employee or distributee.

(C) Computation and Payment. -

(1) In General. - The tax shall be computed upon the

taxable income of the estate or trust and shall be

paid by the fiduciary, except as provided in Section

63 (relating to revocable trusts) and Section 64

(relating to income for the benefit of the grantor).

(2) Consolidation of Income of Two or More Trusts.

- Where, in the case of two or more trusts, the

creator of the trust in each instance is the same

person, and the beneficiary in each instance is the

same, the taxable income of all the trusts shall be

consolidated and the tax provided in this Section

computed on such consolidated income, and such

proportion

of

said

tax

shall

be

assessed

and

collected

from

each

trustee

which the taxable

income of the trust administered by him bears to

the consolidated income of the several trusts.

SEC. 61. Taxable Income. - The taxable income of the

estate or trust shall be computed in the same manner

and on the same basis as in the case of an individual,

except that:

(A) There shall be allowed as a deduction in computing

the taxable income of the estate or trust the amount of

the income of the estate or trust for the taxable year

which is to be distributed currently by the fiduciary to the

beneficiaries, and the amount of the income collected by

a guardian of an infant which is to be held or distributed

as the court may direct, but the amount so allowed as a

deduction shall be included in computing the taxable

income of the beneficiaries, whether distributed to them

or not. Any amount allowed as a deduction under this

Subsection shall not be allowed as a deduction under

Subsection

(B)

of

this

Section in the same or any

succeeding taxable year.

(B) In the case of income received by estates of deceased

persons

during

the

period

of

administration

or

settlement of the estate, and in the case of income which,

in

the

discretion

of

the

fiduciary,

may

be

either

distributed to the beneficiary or accumulated, there shall

be allowed as an additional deduction in computing the

taxable income of the estate or trust the amount of the

income of the estate or trust for its taxable year, which is

properly paid or credited during such year to any legatee,

heir or beneficiary but the amount so allowed as a

deduction shall be included in computing the taxable

income of the legatee, heir or beneficiary.

(C) In the case of a trust administered in a foreign country,

the deductions mentioned in Subsections (A) and (B) of

this Section shall not be allowed: Provided, That the

amount of any income included in the return of said trust

shall not be included in computing the income of the

beneficiaries.

SEC. 62. Exemption Allowed to Estates and Trusts. - (as

amended by RA No 10963)

SEC. 63.

Revocable trusts. - Where at any time the

power to revest in the grantor title to any part of the

corpus of the trust is vested (1) in the grantor either alone

or

in

conjunction

with

any

person

not

having

a

substantial adverse interest in the disposition of such part

of the corpus or the income therefrom, or (2) in any

person not having a substantial adverse interest in the

disposition of such part of the corpus or the income

therefrom, the income of such part of the trust shall be

included in computing the taxable income of the grantor.

SEC. 64. Income for Benefit of Grantor. -

(A) Where any part of the income of a trust (1) is, or in the

discretion of the grantor or of any person not having a

substantial adverse interest in the disposition of such part

of the income may be held or accumulated for future

distribution to the grantor, or (2) may, or in the discretion

of the grantor or of any person not having a substantial

adverse interest in the disposition of such part of the

income, be distributed to the grantor, or (3) is, or in the

discretion of the grantor or of any person not having a

substantial adverse interest in the disposition of such part

of

the

income

may be applied to the payment of

premiums upon policies of insurance on the life of the

grantor, such part of the income of the trust shall be

included in computing the taxable income of the grantor.

`

(B) As used in this Section, the term ' in the discretion of

the grantor ' means in the discretion of the grantor, either

alone or in conjunction with any person not having a

substantial adverse interest in the disposition of the part

of the income in question.

SEC.

65.

Fiduciary

Returns.

-

Guardians,

trustees,

executors, administrators, receivers, conservators and all

persons or corporations, acting in any fiduciary capacity,

shall render, in duplicate, a return of the income of the

person, trust or estate for whom or which they act, and be

subject to all the provisions of this Title, which apply to

individuals in case such person, estate or trust has a gross

income of Twenty thousand pesos (P20,000) [40] or over

during the taxable year. Such fiduciary or person filing

the return for him or it, shall take oath that he has

sufficient knowledge of the affairs of such person, trust or

estate to enable him to make such return and that the

same is, to the best of his knowledge and belief, true and

correct, and be subject to all the provisions of this Title

which apply to individuals: Provided, That a return made

by or for one or two or more joint fiduciaries filed in the

province where such fiduciaries reside; under such rules

and

regulations

as

the

Secretary

of

Finance,

upon

recommendation of the Commissioner, shall prescribe,

shall be a sufficient compliance with the requirements of

this Section.

SEC. 66. Fiduciaries Indemnified Against Claims for

Taxes Paid. - Trustees, executors, administrators and

other fiduciaries are indemnified against the claims or

demands of every beneficiary for all payments of taxes

which

they

shall

be

required

to

make

under

the

provisions of this Title, and they shall have credit for the

amount of such payments against the beneficiary or

principal in any accounting which they make as such

trustees or other fiduciaries.

CHAPTER XI OTHER INCOME TAX

REQUIREMENTS

SEC. 67. Collection of Foreign Payments. - All persons,

corporations,

duly

registered

general

co-partnerships

(companies

colectivas)

undertaking

for

profit

or

otherwise the collection of foreign payments of interests

or dividends by means of coupons, checks or bills of

exchange shall obtain a license from the Commissioner,

© Compiled by RGL

33 of 201