Article 20. STUDENTS AND TRAINEES

This Article provides that a resident of one of the Con­

tracting States who goes to the other Contracting State for the

purpose of full-time education at a recognized educational

institution or for full-time training shall be exempt from tax by that other Contracting state with respect to payments that arise

outside that State and that are for the purpose of the individual's maintenance, education, or training. The tax

exemption, however, applies to an apprentice or business trainee

for a maximum of three years from the day the apprentice or

trainee first arrives in the State for the purpose of the appren­

ticeship or business training.

**If** the visitor comes principally to work in the host State
but also is a part-time student, he would not be entitled to the

benefits of this Article, even with respect to any payments he may receive from abroad for his maintenance or education, and

regardless of whether or not he is in a degree program. Whether
a student is to be considered full-time will be determined **by** the

rules of the educational institution at which he is studying.

Similarly, a person who visits the host State for the purpose of

obtaining business training and who also receives a salary from his employer for providing services would not be considered a trainee and would not be entitled to the benefits of this Article. An educational institution is understood to be an institution that normally maintains a regular faculty and normally has a regular body of students in attendance at the place where the educational activities are carried on. An educational institu­ tion will be considered to be accredited if it is accredited by an authority that generally is responsible for accreditation of institutions in the particular field of study. A payment will be considered to arise outside the host State if the payor is located outside the host State. Thus, if an employer from one of the Contracting States sends an employee to the other Contracting State for training, the payments the trainee receives from abroad from his employer for his mainte

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nance or training while he is present in the host state will be

exempt from host-country tax.

The 1956 Convention provides a similar exemption for stu­ dents, but does not require full-time attendance at a recognized

educational institution. As under this Convention, the **1956**
Convention does not impose a time limit on the length of stay **for**
purposes of the tax exemption. For apprentices, the **1956** Conven­

tion provides a broad exemption from host country tax for persons temporarily present, without a specific time limitation, for

purposes of acquiring business or technical experience. The **1956**

Convention also provides an exemption from host country tax for the compensation for services of certain trainees whose annual compensation for services performed does not exceed $10,000.

By virtue of the exceptions to the saving clause in subpara­ graph 5(b) of Article 1 (Personal Scope), the benefits conferred by the host State are not subject to the saving clause of para­

graph 4 of Article **I** with respect to individuals who are neither
citizens of nor lawful permanent residents in that State. Thus,

a citizen of the United States who is a resident of Austria and

is in the United States to study at an American university does
not benefit from the **U.S.** tax exemption accorded **by** this Article.
However, if the individual is not a citizen of the United States

and does not acquire immigrant status in the United States, the fact that the individual may become a U.S. resident for tax purposes will not lead to a denial of the benefits of this Article.