The Singapore Income Tax Board of Review (the Board) has dismissed an appeal by three specialist doctors concerning the Comptroller of Income Tax’s recharacterisation of corporate profits as taxable individual income under anti-avoidance provisions.
Case Background:
Appellants GIS, GIT, and GIU – former colleagues operating a joint medical practice – incorporated a jointly held company (Company A) to conduct their private practice. Company A derived revenue from their specialist medical services, paying each appellant a fixed monthly salary. The doctors also received dividends from Company A.
Restructuring & Tax Avoidance Arrangements:
Subsequently, the doctors incorporated separate medical consultancy companies (Companies B), interposing them between themselves and Company A. Company A paid consultancy fees to Companies B, with the doctors receiving dividends/directors’ fees from Companies B.
Later, they introduced surgical companies (Companies C) to receive inpatient service fees directly from patients. The doctors then drew dividends, directors’ fees, and salaries from Companies C, while dissolving their medical consultancy companies (Companies B).
Comptroller’s Action & Reassessment:
The Comptroller invoked Section 33, reclassifying profits distributed via Companies B and C as individual remuneration taxable in the hands of the doctors for Years of Assessment (YA) 2013 to 2018. Additional tax assessments were raised accordingly.
Appeal & Dismissal:
The doctors contested the assessments, arguing the Comptroller improperly applied Section 33. The Board dismissed the appeal, finding the Appellants failed to demonstrate the Comptroller’s exercise of Section 33(1) powers was “unfair and unreasonable.” The Board reserved the right to issue fuller grounds of decision and correct any errors in the future.
This ruling reinforces the Comptroller’s authority to disregard corporate structures designed primarily to divert professional income (remuneration) into lower-taxed business profits or dividends. It serves as a critical reminder to professionals corporatising their practices that aggressive income-splitting arrangements risk Section 33 intervention.
Source: GIS and others v The Comptroller of Income Tax [2025] SGITBR 3