In Italy, foreign multinational telecommunications companies must comply with the Electronic Communications Code, implemented through Legislative Decree No. 207/2021. This regulation introduces several important changes to govern the telecommunications sector in alignment with the European Electronic Communications Code. The main provisions include:
- Expanded definition of electronic communications services: It also includes interpersonal communication services such as messaging applications, although the obligations are less stringent if they do not use numbering resources.
- Enhanced rights for end-users: Consumer protections are expanded, including greater pricing transparency, the right to terminate contracts in case of unilateral changes, and a maximum contract duration.
- Market regulation and competition: Rules for operators with significant market power are strengthened, including penalties for non-compliance that can reach up to 5% of the operator's annual revenue.
- Universal Internet Access: Internet access is included within the scope of universal service, granting the Communications Authority (AGCom) the power to impose specific obligations in areas where the market does not ensure adequate coverage.
- Compliance with the Electronic Communications Code: Italy has adopted the new European Electronic Communications Code, which establishes a regulatory framework for electronic communications services. This expands the definition of "electronic communications services" to include new players, such as over-the-top (OTT) service providers.
- Authorizations and Licenses: Companies wishing to operate in the communications sector in Italy must obtain authorizations from the Autorità per le Garanzie nelle Comunicazioni (AGCOM), the national regulatory authority for the communications industries in Italy. AGCOM is responsible for regulatory and supervisory functions in telecommunications, television, newspapers, and postal services.
- Review of Foreign Direct Investments (FDI): Italy regulates the acquisition of strategic assets through an FDI decree, requiring prior notification and approval of transactions that may result in a change of control over assets in critical sectors such as communications. This review ensures that such investments do not compromise national or strategic security.
- Tax Obligations: This year, Italy implemented a global minimum tax of 15% for multinational companies with annual revenues exceeding 750 million euros. This measure, in line with OECD standards and an EU directive, is aimed at countering practices by multinationals that establish entities in low-tax jurisdictions with rates below 15%.
- Electronic Invoicing: Italy has implemented the mandatory use of electronic invoicing between businesses and public administrations (B2G) and, subsequently, in the B2B sector. Foreign companies conducting business transactions with Italian companies are required to use the Sistema di Interscambio (SdI) for the transmission of electronic invoices. This means that all foreign invoices must be reported through the SdI.
For more information on establishing a business in Italy, contact our members Pirola Pennuto Zei & Associati