On 8 July this year, the Decree of the Ministry of Cultural Heritage and Tourism – the Decree - (dated June 20, 2014) entered into force. The Decree updates for the next three years the copyright levy applicable to the records of phonograms and videos used by private subjects, as foreseen by the Italian Copyright Law,. Further to the Decree's introduction, SIAE, the Italian collecting society, has recently published the charts from which businesses subject to the levy obligations could calculate and pay the relevant amount to SIAE.
As shown in the published charts (available at http://www.siae.it/view.asp?pdf=MusicaMFV_ModelloTracciatoDM20062014.xls), the Decree, although in the same spirit as the previous legislation (i.e. the Ministerial Decree of 31 December 2009), substantially modified the applicable amounts and introduced some important amendments.
Although the new variations are not a surprise, since the main scope of the Decree is to adjust the levy to reflect the most recently developed technologies, the general increase of the levy triggered a heated debate among operators in the sector.
Among the most important changes, the Decree gave particular significance to smartphones and tablets. As a matter of fact, this was the first time that these devices were expressly mentioned by the Decree. With reference to smartphones, the levy - previously calculated in a lump sum of 0.90 cent - must now be calculated depending on the dimensions of the memory included within the device.
Notwithstanding the detailed list provided by the Decree on the devices subject to levy and the relevant amounts, several issues connected to the application of the Decree were not well clarified. A good example, among others, might be the application of letter q) of the Decree, concerning external Hard Disks, to personal computers.
While the previous wording of the rule left little doubt on the application of the levy solely to external Hard Disks, the last amendment of the rule (i.e. the application of the levy to "external hard disk with or without housing which allows the application to other devices including SSD (Solid State Drive)") seems to leave room for the additional inclusion of internal Hard Disks within this rule.
In these regards, a possible interpretation could lead to the application of the above provision both to external Hard Disks and to "internal" Hard Disks (i.e. those which function by being inserted in a PC) sold separately from personal computers. However, where the sale of the internal Hard Disk takes place after it has already been integrated within the PC (in a non-removable manner), the specific levy applying to personal computers (under letter y) of the Decree) would apply instead.