Income derived from the operation of aircraft or a ship or ships by a corporation organized under the laws of a foreign country shall not be included in gross income, and shall be exempt from the taxes imposed by this part if:
(a) The aircraft are registered or the ships are documented under the laws of the foreign country;
(b) The income of the corporation is exempt from national income taxes by reason of a treaty or agreement between such foreign country and the United States which provides for an equivalent exemption to corporations organized in the United States; and
(c) Units of government (other than at the national level) within such foreign country do not impose a tax upon corporations organized in the United States with respect to income derived from the operation of aircraft registered or ships documented under the laws of the United States.
(Added by Stats. 1969, Ch. 1191.)