ALTERNATIVE TAXATION  GR: Cannot utilize allowable deductions.
Applies only to sale of real property classified as a
capital asset by an individual taxpayer in favor of the
government or any of its political subdivisions
agencies or GOCCs .
TAXATION OF OTHER CAPITAL ASSETS
When we talk about other capital assets then i'm
speaking of those assets other than shares of stocks
and real property. Since they involve capital assets
then there is no business tax implication as easy as
that. Remember: capital asset no business tax
implication, and they will be subject to normal tax.
Therefore, creditable withholding tax shall apply.
lastly the transaction involving sale or other capital
assets shall be subject to the special rules. namely you
have:
1. Lost limitation rule.
2. Holding period rule. And,
3. Net capital loss carryover.
NONRESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS
 Subject to same tax implication with respect to
resident citizens.
 Same tax implication whether the income is:
a. compensation income.
b. Royalties.
c. Prizes.
d. Winnings. And,
e. Rent.
However, the tax rate shall vary with respect to dividend
income.
DIVIDEND INCOME
Nonresident aliens engaged in trade or business shall
be subject to 20% final withholding tax with respect to
his dividend income.
Interest from expanded foreign currency deposit shall
likewise have a different tax implication with a resident
citizen
INTEREST FROM EXPANDED FOREIGN CURRENCY
DEPOSIT
Nonresidents shall be exempt from tax with respect
to interest earned from expanded foreign currency
deposit system.
Note: A nonresident alien engaged in trade or business is a
nonresident.
NONRESIDENT ALIENS NOT ENGAGED IN TRADE OR
BUSINESS
 25% final withholding tax based on the amount
of gross income.
 But there is an exception to this general rule of
25% final withholding tax which are transactions
sale of unlisted shares and sale of real property
classified as a capital asset.
SALES OF UNLISTED SHARES
The tax implication shall be 15% final withholding tax.
SALE OF REAL PROPERTY CLASSIFIED AS A CAPITAL
ASSET
Subject to 6% capital gains tax.
income on alien employees has a different tax
implication under the train law.
EMPLOYEES OF REGIONAL HEADQUARTERS,
REGIONAL OPERATING HEADQUARTERS, OFFSHORE
BANKING UNITS, AND PETROLEUM SERVICE
CONTRACTORS OR SUBCONTRACTORS
Subject to regular income tax rates under section 24
(A) of the tax code as amended. Without prejudice so
the application of preferential tax rates under existing
international tax treaties if warranted.
So, the only way for one company to change the tax
implication of its employees, I'm referring to companies
which are in the nature of art RHQ's, ROHQ’s, OBU’s, and
also petroleum service contractors and subcontractors,
is when the tax treaty provide for a preferential tax rate.
Meaning, a lower rate if there is no tax treaty which
provides for a preferential tax rate, then the employees
of these entities shall be subject to regular income tax.
And since they are subject to regular income tax, the
90,000-exemption 13th month and other benefits applies
to alien employees.
Question: Are Filipino employees employed by these
entities included?
Answer: Yes, they are.
INCOME TAXPAYERS EXEMPT FROM TAX
 Income taxpayers exempt from tax are
minimum wage earners which I had already
discussed in my previous session.
 Take note that in my earlier session, I had
mentioned that the exemption shall likewise
extend to:
A. Holiday pay.
B. Hazard pay.
C. Night shift differential. And,
D. Overtime pay.
  the income from business trade or profession
will not be covered by the tax exemption.

Note: the earning of an income from business trade

professional will not negate the tax exemption of the
minimum wage earner with respect to his compensation
income.

TAX TREATIES
Remember that most international agreements which
grant withholding tax immunity to foreign governments,
embassies, diplomatic missions, and international
organizations also provide exemption to their officials
and employees who are foreign nationals and or non-
Philippine residents from paying income taxes on their
salaries and emoluments, this must be respected.

Most of these international agreements grant

withholding tax immunities. Diplomats and ambassadors
of foreign countries are exempt from taxes, also the
income is also exempt from withholding tax.