Some tax treaties, such as the one between the US and Germany, have different articles for professors/teachers/researchers and recipients of scholarships. In the aforementioned case, these are articles 20(1) and 20(3), with some mutual exclusions. In the 2006 version, these read:

Article 20 (Visiting Professors and Teachers; Students and Trainees)
1. Remuneration that a professor or teacher who is a resident of a Contracting State and who is temporarily present in the other Contracting State for the primary purpose of carrying out advanced study or research or for teaching at an accredited university or other recognized educational institution, or an institution engaged in research for the public benefit, receives for such work shall be taxable only in the first-mentioned Contracting State for a period not exceeding two years from the date of his arrival. This Article shall not apply to income from research if such research is undertaken not in the public interest but primarily for the private benefit of a specific person or persons. The benefits provided in this paragraph shall not be granted to an individual who, during the immediately preceding period, enjoyed the benefits of paragraph 2, 3, or 4.
3. Payment other than compensation for personal services that a person who is or was immediately before visiting a Contracting State a resident of the other Contracting State receives as a grant, allowance, or award from a non-profit religious, charitable, scientific, literary, or educational private organization or a comparable public institution shall not be taxed in the first-mentioned State.

So when receiving a scholarship as a professor, teacher or researcher, both articles may apply. Can one choose to claim an exemption under (1) even if (3) is applicable? If not, this would mean one could lose the possibility of claiming an exemption for future remuneration which is not a scholarship.

Follow-up question: can one choose not to claim tax-treaty benefits for some income (for example, said scholarship) in order to avoid losing later benefits for teacher remuneration?

1 Answer 1


No, both articles do not apply. Scholarship is not salary, so only 20(3) applies.

The treaty doesn't seem to provide an "opt-out" option, so no - you cannot choose to not apply the treaty in the period of scholarship to be able to apply it in the following period of salaried employment.

Generally, in legaleese, "shall" or "will" mean that there's no other option (as opposed to "may" or mentioning an explicit election).

  • So "Remuneration" in 20(1) includes salaries, but not scholarships? Do you happen to know a citable reference which has definitions of these three terms?
    – bers
    Commented Mar 13, 2016 at 13:22
  • @bers merriam-webster.com/dictionary/remuneration
    – littleadv
    Commented Mar 13, 2016 at 16:13
  • Foreign National Tax Resource (FNTR), which is an online tax software by Thomson Reuters, has a check-box titled "Take Treaty Benefit" for each type of income. Does that contradict your answer to my follow-up question, or is that just their way of giving you an option to not use take the benefit in case the program makes an erroneous determination that you shall?
    – bers
    Commented Mar 27, 2016 at 19:48
  • This page says "Foreign nationals may decline treaty benefits, choosing instead to pay the lower U.S. tax.": tax.thomsonreuters.com/wp-content/pdf/nra-tax/…
    – bers
    Commented Mar 27, 2016 at 19:50
  • @bers that actually stems from the non-discrimination clause of the treaty - you cannot be forced to pay a rate higher than the regular US tax. But that wouldn't apply to your situation since the treaty benefit is lower than the US tax.
    – littleadv
    Commented Mar 28, 2016 at 20:04

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