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Edited version of your written advice
Authorisation Number: 1012872135501
Date of advice: 7 September 2015
Ruling
Subject: Educational Institution - exemption from income tax
Question 1
Is the income of the Entity exempt from income tax pursuant to section 50-1 of the Income Tax Assessment Act 1997 ( ITAA 1997) on the basis that the Entity is a public education institution as described in item 1.4 of the table in section 50-5 of the ITAA 1997?
Answer
Yes.
This ruling applies for the following periods:
01 July 2015 - 30 June 2016.
The scheme commences on:
01 July 2015.
Relevant facts and circumstances
The Entity is an Australian resident educational institution.
The Entity is endorsed as a Deductible Gift Recipient (DGR) under subsection 30-25(1) of the ITAA 1997 as an educational institution.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 50-1
Income Tax Assessment Act 1997 section 50-5
Income Tax Assessment Act 1997 section 50-50
Income Tax Assessment Act 1997 section 50-55
Reasons for decision
Summary
The Entity will be exempt from income tax pursuant to section 50-1 of the ITAA 1997 on the basis that the Entity is a public education institution as described in item 1.4 of the table in section 50-5 of the ITAA 1997.
Detailed reasoning
Section 50-1 of the ITAA 1997 provides for the total ordinary and statutory income of entities covered by the tables contained in Division 50 of the ITAA 1997 to be exempt from income tax.
Item 1.4 of the table in section 50-5 of the ITAA 1997 covers a public educational institution. An additional requirement is that the entity also satisfies the special conditions contained in section 50-55 of the ITAA 1997.
The Entity is an endorsed DGR and has a physical presence in Australia and to that extent incurs its expenditure and pursues its objectives principally in Australia. The Entity satisfies the special conditions in subsection 50-55(1) of the ITAA 1997.
On or after 30 June 2013, the Entity must also satisfy the conditions in subsection 50-55(2) of the ITAA 1997.
Under subsection 50-55(2) of the ITAA 1997, the entity must:
(a) comply with all the substantive requirements in its governing rules; and
(b) apply its income and assets solely for the purposes for which the entity is established.
The Entity has confirmed that both of these conditions are satisfied and met within their Constitution.
Therefore, the Entity is accepted as a public educational institution which is covered by item 1.4 in section 50-5 of the ITAA 1997 and will be exempt from income tax pursuant to section 50-1 of the ITAA 1997.