Article 20. STUDENTS, TRAINEES AND RESEARCHERS

This Article deals with visiting students, trainees, and, researchers. An individual who is a resident of one of the Contracting States and who visits the other Contracting State for the primary purpose of studying at an accredited educational institution, such as a university, or of studying or doing research as the recipient of a grant or similar payment from a charitable organization, or of acquiring training for a profession, will not be taxed by that other State on amounts received from abroad to cover his expenses and on any grant or similar payment regardless of its source.

The reference to "primary purpose" is meant to describe individuals participating in a full-time program of study, training, or research. It was substituted for the reference in the OECD Model to "exclusive purpose" to prevent too narrow an interpretation; it is not the intention to exclude full-time students who, in accordance with their visas, may hold part-time employment jobs. For U.S. purposes, a religious, charitable etc. organization as described in paragraph 1(c) means an organization that qualifies as tax-exempt under section 501(c)(3).

The exemptions provided in paragraph 1 are available for the period of time ordinarily necessary to complete the study, training, or research but not for more than five years in the case of training or research. It is expected that in most cases study programs would also be completed within five years; however, an individual who completes both undergraduate and graduate degrees could require a longer period.

For the exemption to apply to a researcher, the research must be undertaken in the public interest, and not primarily for the private benefit of a specific person or persons. For example, the exemption would not apply to a grant from a taxexempt research organization to search for the cure to a disease if the results of the research become the property of a forprofit company. The exemption would not be denied, however, if the tax-exempt organization licensed the results of the research to a for-profit enterprise in consideration of an arm's-length royalty consistent with its tax-exempt status.

This Article is an exception to the saving clause of paragraph 3 of Article 1 (General Scope). Thus, a Ukrainian student, trainee, or researcher is entitled to the benefits of this Article even if such individual becomes a resident of the United States under the substantial presence test of Code section 7701(b). However, the benefits of this Article are not available to a U.S. citizen or green card holder.

Unlike the 1973 Convention, the Convention does not provide any special benefits for teachers. Pursuant to Article 29 (Entry into Force), the benefits provided by the 1973 Convention may be claimed for the first taxable year after the entry into force of the Convention, but in that case none of the benefits of the new Convention may be claimed during that year.