The Austrian Federal Tax Court held in a recent decision that income from employment derived by an Austrian resident from Swiss public funds in respect of services rendered by him/her to the Swiss government and to Swiss cantons and performed partially in Switzerland and in Austria is taxable in Austria, thereby giving credit for the taxes levied in Switzerland. For the part of income derived from work performed in Austria, Switzerland could not exercise its taxation right granted by the tax treaty due to limitations of domestic law concerning income derived by non-resident taxpayers. Following an extraordinary appeal by the taxpayer, this decision is currently under review by the Austrian Supreme Administrative Court. This court procedure is still pending. Heinz Jirousek gives his opinion on the decision of the Austrian Federal Tax Court and suggests a possible solution for the critical issues of treaty interpretation underlying this case.