Beside regular taxation, Switzerland allows foreigners resident in Switzerland to choose an alternative method of taxation where annual personal expenditure serve as a tax base. This opportunity causes rich foreigners to move to Switzerland in order to reduce their tax liability. Especially countries which border to Switzerland are in fear of losing rich residents. In this paper, Deborah Knirsch and Sebastian Schanz analyze if taxation on annual expenses in Switzerland is optimal for rich Austrian residents. The authors consider dividends, interests and royalties in Austria and Switzerland, and derive the absolute tax liability to show if it is advantageous to move to Switzerland or stay in Austria. They show that it is not optimal to move to Switzerland if taxable income consists of domestic dividends. In contrast, taxpayers who earn a high level of interests or royalties can reduce their tax liability significantly by moving to Switzerland.