(1) An entity covered by item 1.1 is not exempt from income tax unless the entity:
(a) has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia; or
(b) is an institution that meets the description and requirements in item 1 of the table in section 30-15; or
(c) is a prescribed institution which is located outside Australia and is exempt from income tax in the country in which it is resident; or
(d) is a prescribed institution that has a physical presence in Australia but which incurs its expenditure and pursues its objectives principally outside Australia;
and the entity satisfies the conditions in subsection (2).
Note 1: Certain distributions may be disregarded: see section 50-75.
Note 2: The entity must also meet other conditions to be exempt from income tax: see section 50-52.
(2) The entity must:
(a) comply with all the substantive requirements in its governing rules; and
(b) apply its income and assets solely for the purpose for which the entity is established.