An energy tariff is a type of tax that is assessed on an energy product. For example, an energy tariff may be imposed on the sale or purchase of oil, electricity, coal, and gas. Energy taxes can be levied by local, state, provincial, or federal governments. Energy products can be taxed at significantly different rates from country to country. Even within the same country, energy tariff rates often vary widely from city to city or province to province.
In order to promote sustainable energy policies, some countries offer individuals and entities energy tariff credits for using renewable energy resources. For example, private citizens who use solar, wind, or biofuels as energy sources may receive income tax credits in some countries. Other countries give companies tax breaks for using renewable energy equipment or adopting sustainable business practices. Some countries attempt to reduce the use of non-renewable energy sources by levying energy tariffs on non-renewable energy products, such as petroleum or natural gas.
Regulations, customs tariffs, and restrictions often apply to energy products that are imported or exported between countries. These types of taxes and limitations are often either trade-specific or product-specific. In order to comply with import and export laws, importers and exporters may need to obtain country-specific certifications, licenses, or documentation.
Before importing or exporting energy products between countries, importers and exporters must understand whether any import tariffs or export tariffs will apply to the transaction. An energy export tariff is a type of customs tariff imposed on energy products brought into a country. An energy import tariff, on the other hand, may be imposed on energy sources exiting a country.
Some countries require importers and exporters to obtain licenses in order to exchange energy goods between countries. Preferential duty rates may apply to some energy products, depending on whether any preferential trade agreements exist between the countries involved in the energy import or export transaction. In addition to assessing import and export energy tariffs, some countries impose energy charges on imported and exported products. A country may, for instance, levy anti-dumping duties on an energy product.
In the international energy trade market, many countries use a harmonized tariffs schedule when assessing an energy tariff fee. These kinds of schedules can help simplify trade tax calculation. Additionally, a harmonized tariff schedule can help ensure the correct fees are levied on energy products by allowing countries to classify energy products using internationally standardized names and numbers.