The allocation of profits to permanent establishments (PE) situated in a tax treaty country offering low taxation of business profits may considerably reduce an Austrian taxpayer’s tax burden if the tax treaty provides for the exemption method to avoid double taxation. Experience shows that in particular Liechtenstein and Switzerland attract taxpayers to establish a fixed place of business so as to avoid Austrian income taxes. In its decision of March 15th, 2013, RV/0471-F/10, the Independent Finance Board (UFS) had to deal with an Austrian consultant allegedly working for Austrian clients through his PEs in Liechtenstein and Switzerland. Stefan Bendlinger analyses the decision with a view to the international principles of attributing income to PEs.