3792391 Canada Inc v The King: A cautionary tale to tenants of residential rental apartments

  • April 21, 2023
  • Brittany Rossler

A recent decision by the Tax Court of Canada highlights the importance of tenants verifying the residency status of their landlords and complying with any obligations to withhold tax under Part XIII of the Income Tax Act (the “Act”). In 3792391 Canada Inc v The King, 2023 TCC 37, the court held that a taxpayer was liable for failing to withhold and remit 25% tax on the rental payments it made to a non-resident landlord even though the taxpayer did not know that the landlord was a non-resident for tax purposes.


Mr. Siscoe was the shareholder of 3792391 Canada Inc. (the “Appellant”), which operated a gym in Montreal. He entered into a lease for his personal residence with Anjar Investments Ltd. (“Anjar”) in 1996. In 2006, Anjar sold the leased property to one of its shareholders, Sebastiana Trimarchi. Mr. Siscoe testified that he did not know Ms. Trimarchi was the new owner of the property. In 2010, Mr. Siscoe signed a 3-year lease for the property with Ms. Trimarchi identified as the landlord/lessor. The Appellant began paying Mr. Siscoe’s rent in 2011 (as was accounted for in the shareholder loan account). It made the following rental payments to Ms. Trimarchi during the taxation years under appeal:

Taxation Year

Gross Rent













The Minister of National Revenue (the “Minister”) assessed the Appellant under subsection 215(6) for failure to deduct or withhold Part XIII tax payable under paragraph 212(1)(d) on rent paid to a non-resident, as well as interest and penalties pursuant to subsections 227(8) and (8.3).