All About Car Tax in Germany And How To Pay It
When you own a car in Germany, you need to regularly pay taxes on it. The amount is different for each vehicle and has to be calculated individually. There are various factors influencing the annual car tax for German drivers. Generally, owners of diesel vehicles pay the most, yet, some car types are even subject to a tax exemption.
Every car owner is obligated to pay an annual vehicle tax in Germany. The majority of drivers owe between 100 EUR and 300 EUR per year. The amount is directly related to the engine size of the car and CO2 emission. The payment is made to German customs via the SEPA transfer.
This article explains everything you need to know about car tax in Germany, how to calculate and how to pay it.
Vehicle tax in Germany (Kraftfahrzeugsteuer)
In Germany, every car owner has to pay a Motor Vehicle tax (Kraftfahrzeugsteuer). It’s an annual tax, meaning you only pay it once a year. The amount of car tax ranges from 30 EUR to several hundred. The average vehicle tax is between 100 EUR and 300 EUR per year.
The amount you pay in car taxes is based on the engine capacity and CO2 emission. The date of the first registration also plays a role.
Drivers pay 2 EUR to 9.50 EUR per 100 cm³ of engine capacity and 2 EUR per g/km of CO2 your car produces above the set limit. You can calculate the annual vehicle tax here.
For example, car taxes for the VW Golf V can be between 100 EUR and 300 EUR per year, depending on the first registration, engine type, and its capacity.
How much is a car tax in Germany?
Most car owners in Germany pay between 100 EUR and 300 EUR per year in vehicle taxes. The tax is paid yearly, on a regular basis.
Generally, the more pollutant your car is, the more you pay in vehicle tax. Costs will be higher for diesel cars, and for electric vehicles, no car tax applies in the first ten years.
Moreover, drivers pay the least tax on small petrol cars. For example, a vehicle with a 1,400 cm³ petrol engine and a CO2 emission of 90 g/km is taxed at just 38 EUR per year. A BMW X5 with a three-liter six-cylinder engine and 190 g/km emissions costs 250 EUR a year.
Diesel cars are the most expensive. Hybrid vehicles are also quite affordable regarding the vehicle tax – they have low CO2 emissions. At the same time, owners of electric cars in Germany are exempt from the vehicle tax for ten years after the first car registration.
Engine displacement, pollutant emissions, first registration, as well as diesel, gasoline, or electric drive, determine the amount of the vehicle tax in Germany. Another decisive factor is whether your car was registered for the first time before or after June 30, 2009.
Nonetheless, the most significant element affecting the car tax amount is your car’s engine size.
As of January 1, 2021, new rates apply to cars registered for the first time after this date. However, this doesn’t change the taxation of vehicles registered previously.
How to calculate a German vehicle tax
Determining how much vehicle tax you must pay in Germany isn’t easy. It depends on several factors, particularly engine capacity and emissions. There are some great online calculators that will do this job for you, but firstly visit the official website of German authorities.
Factors that decide how much you will pay in car tax in Germany:
- The type of vehicle and year of manufacture
- The engine type: petrol, diesel or electric
- The amount of CO2 (carbon dioxide) cars produce
- Engine size or cylinder volume. You can see this info in the new registration certificate Part I under P.1 (item 8 in the old vehicle registration certificate).
- Date of the first registration: You can find this info in the new registration certificate Part I under point B (point 32 in the old vehicle registration certificate).
Besides, vehicles first registered before June 30, 2009, are taxed according to engine capacity, engine type, and emission class. Whereas if you drive a car that was registered after that date, you also need to know the CO2 emission in grams per km (g CO2/km).
So the data you need to calculate a vehicle tax will depend on the initial registration date of your car.
The tax amount for electric cars is calculated based on the vehicle’s weight. The less the vehicle weighs, the less tax amount is to pay. If the car is heavier than 3,500 kg, the volume of harmful emissions is also considered.
Calculate car tax in Germany
Step 1. Check the engine capacity of your car. For a petrol engine, car owners have to pay 2 EUR per 100 cm³, and for a diesel engine – 9.50 EUR per 100 cm³.
Step 2. Check how much CO2 emission your car produces. The cost is 2 EUR per gram above the limit. However, the amount varies depending on when a vehicle was registered for the first time:
- till the end of 2011 – 120 g
- from 2012 till 2013 – 110 g
- after that – 95 g
- You only have to pay for CO2 that your car produces above these limits.
Example of the vehicle tax calculation
For a diesel car with an engine capacity of 1,968 cm³, you will pay:
- 9.50 EUR for every 100 cm³ = 20 * 9,50 EUR. Hence, your annual vehicle tax is 190 EUR.
- Let’s say a vehicle was registered in 2010. The limit for CO2 was 120 g/km. However, your car emits 154 g/km (34 grams too much). You have to pay 2 EUR for each additional gram.
- Consequently: the vehicle tax for your car is 190 EUR plus 68 EUR for CO2 – a total of 258 EUR per year.
You can calculate your car taxes on the official website.
Car tax for electric cars
Do you also have to pay a tax on electric cars in Germany? Fortunately, owners of electric cars are exempt from vehicle tax for the first 10 years from the initial registration date.
Exemption from vehicle tax for electric cars
If your car is 100% electric, there are no vehicle taxes for ten years from the date of initial registration. If the owner was changed, the tax exemption is passed on – until the ten years expire.
No vehicle tax exemption for plug-in hybrids
Plug-in hybrids aren’t exempt from vehicle tax in Germany. Car taxes for these vehicle types are calculated similarly to any other car – based on the engine capacity and CO2 emission.
However, taxes for plug-ins are usually lower because CO2 emissions are also lower compared to petrol or diesel vehicles. Besides, all car owners with low-emission vehicles that have a maximum of 95g of CO2 pay only 30 EUR in annual taxes. This benefit is limited to the end of 2024.
How to pay German car tax?
While registering your car, you can decide if you want your car tax to be collected automatically or if you want to transfer it yourself. For this, you need to enter your account details and agree to a SEPA direct debit mandate.
The motor vehicle tax is paid twelve months in advance using the SEPA payment (direct debit mandate). For most people, it’s deducted from their bank account automatically. German customs are responsible for charging you a vehicle tax.
When to pay it?
Once you have registered your car, you will receive a tax assessment and your tax number in the mailbox after about two weeks. You will need to save it since it’s only sent once.
You have to pay the vehicle tax one year in advance. Payment every six months is possible if the vehicle tax is more than 500 EUR. You can only pay each quarter if the tax is over 1,000 EUR. Monthly payments aren’t possible.
The first payment is due on the registration date on which the vehicle is registered in your name. If you register your car in September, for example, you always have to pay your car tax in September.
If you haven’t agreed on automated payments, make sure that you transfer the money on time.
Not paying a car tax in Germany
If you fail to pay your car tax, you receive a reminder (Mahnbescheid) from customs. If you still don’t pay the tax, the state order officials (Amt für öffentliche Ordnung) will get involved.
They will notify you too. If you don’t react, the officials will remove the valid stickers from your car. That means your vehicle is no longer can be used on public roads. So, don’t play with taxes in Germany.
Car sales tax
Whether you have to pay taxes when buying or selling a car depends on several factors.
- You are a natural person selling a car to the individual (natural person) – no tax is charged.
- You are a natural person selling a car to the dealer – no tax is charged
- You are a legal entity selling a vehicle to the individual (natural person) or other legal entity – you will pay a VAT tax or Mehrwertsteuer (MwSt) of 19% or the net price of the car.
However, if you buy a car in another EU country and bring it to Germany, you must pay 19% VAT tax of the price to the German tax office. On the other hand, a vehicle will be sold to you tax-free.
In many situations, the same rule applies when you buy a car in Germany and take it to another EU state. You pay VAT taxes at your destination.
Read more about car export and taxes in Germany in this guide.
If you own a car in Germany or looking to buy one, read our other car-related articles:
- Can a foreigner buy a car in Germany?
- Cheapest cars in Germany
- Used car prices in Germany
- Getting a car loan in Germany
- Best car loans in Germany
- How to buy a car in Germany for export
- Best websites to buy a used car in Germany
- Car insurance in Germany
- Cheapest car insurance in Germany
- Buying vs leasing a car in Germany
- How much does it cost to own a car in Germany?