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Ex-KKH doctors move to private practice & declare low salaries to avoid income tax, lose IRAS challenge
IRAS had ruled that their income for the multiple companies they had set up would be taxed under their individual names.
Matthias Ang
June 20, 2026, 08:39 PM
Photo by Matthias Ang
Three specialist doctors have failed in their High Court challenge against a ruling by the Inland Revenue Authority of Singapore (IRAS), regarding how they paid themselves very low salaries in order to avoid income tax.
All three doctors — Adrian Tan, Caroline Khi, and Jocelyn Wong — were colleagues at KK Women's and Children's Hospital, as obstetricians and gynaecologists, before they entered private practice.
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Low monthly salaries
According to The Straits Times, the three doctors entered private practice in 2004, setting up a clinic called ACJ Women's Clinic (ACJW).
Each of them held a third of the company's shares and the position of director. They also signed off on an employment contract which paid them a monthly salary of S$5,000, excluding annual bonuses.
Prior to entering private practice, Tan, the most senior of the three doctors, had drawn a monthly salary of S$45,600 — over nine times the amount.
Set up their own companies
As the business grew, the three of them set up their own medical companies.
In April 2005, Tan and his wife set up AT OG Services as co-directors and equal shareholders.
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Then in May 2007, Khi set up CKYM Holdings as its sole director and shareholder, while Wong established JW Medical Holdings, also as its sole director and shareholder.
In May 2014, they reorganised their practice and set up separate surgical companies where each of them was the sole director and shareholder.
Tan set up ACJ Tan Surgery, Khi set up CKHI Surgery, and Wong established Joy Wong Surgery.
All three companies would send invoices to patients and receive fees for inpatient services while their initial company, ACJW, would invoice patients and receive fees for outpatient services.
Each doctor also signed a contract for a monthly salary of S$6,000 for their own surgical companies, excluding annual bonuses.
Tax rebates, dividends
In establishing their own companies, they were allowed to obtain tax rebates under the Start-Up Exemption and Partial Tax Exemption schemes.
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Furthermore, despite their comparatively modest monthly salaries, they paid themselves very high dividends, which are exempted from tax, and gave themselves interest-free loans.
For the years of assessment from 2013 to 2018, Tan was found to have been paid dividends of S$5.14 million from one firm, and S$2.35 million from another.
He was also found to have obtained S$830,000 in loans from one firm, and up to S$2.1 million from another.
In 2016, the three doctors struck off the three firms they had established in 2005 and May 2007.
However, IRAS objected to one of the firms being struck off and started tax audits soon afterwards.
It concluded that the tax advantages could have been one of the reasons for establishing the medical and surgical companies.
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What did IRAS do?
Following the audit, IRAS decided to revise the assessment for the years of assessment from 2013 to 2018.
In October 2019, the agency issued additional and amended income tax assessments, in which the income from the doctors' businesses was taxed under their individual names instead.
Then in December 2019, IRAS raised additional assessments for year of assessment 2015, to claw back the tax benefits that had been gained from breaking up the business into multiple companies.
The doctors first sought a review of IRAS' decision by the Income Tax Board of Review. They turned to the High Court after they were unsuccessful.
But on Jun. 18, their bid was dismissed by the High Court.
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Doctors 'running afoul' of tax authorities: Judge
Tan was the only one of the three doctors to give evidence before the court.
In his written judgement, Justice Alex Wong noted that their challenge was “the latest of several cases where medical professionals have run afoul of the tax authorities in how they have conducted the business of their medical practices”.
The judge noted that while Tan's evidence of being new to private practice "partially" explained his modest salary, it did not explain why his salary stayed at that level as the practice grew in profits, or why the profits were extracted as dividends and loans.
He added:
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