Vital to get proper advice from accountants

Dr Desmond Wai suggested that appropriate action ought to be taken against accountants who provide improper advice to medical practices leading to a prosecution in court or a fine by the Inland Revenue Authority of Singapore (Iras) (Most doctors act on advice of consultants and accountants; Oct 22).

However, Dr Wai refers to cases of tax avoidance and the setting up of company structures. In such cases, the accountants concerned would have to separately review the corporate structures concerned and ascertain the motives of their clients to determine if tax avoidance is involved. Not all accountants provide such advice.

Furthermore, many clients wish to pay for only the minimum level of service and would usually engage accountants to incorporate their companies at the lowest cost to them, without the need for an analysis on whether their corporate structures may be impugned by Iras.

Merely setting up a company and providing medical services through the company would not amount to tax avoidance where there is no motive of tax avoidance. This is because a company is a recognised business vehicle through which services may be provided.

Iras' initiative to review the operations of doctors and dentists shows it is important for clients to consult their business advisers and accountants, who are able to provide them with proper advice.

Kam You Kin

A version of this article appeared in the print edition of The Straits Times on October 25, 2018, with the headline 'Vital to get proper advice from accountants'. Print Edition | Subscribe