Vehicle tax in Germany

Until 2014, the motor vehicle tax in Germany was collected by the tax office (Finanzamt) and is now collected by the customs office (Zollamt). In this article, we will clarify the amount of the vehicle tax levied in Germany and how to calculate and pay it correctly.

The vehicle is taxed in Germany if:

• it is registered in Germany;
• it is registered abroad but is permanently located in Germany;
• it is used illegally on German roads.

Foreigners who moved to Germany must register their car, obtain German licence plates, and pay tax immediately upon arrival. However, if your stay in Germany is shorter than a year (employment contract, traineeship), you do not need to register your car, but you must still pay tax. These rules do not apply to the tourists travelling by their own car.

Foreign students are exempt from paying the vehicle tax until the end of their studies. If the owner of a car registered in another EU country does not reside in Germany, they are exempt from paying the tax for 12 months. Disabled persons with a German Disability ID card (Behindertenausweis) are exempt from the vehicle tax altogether or receive a 50% reduction.

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Calculating German vehicle tax

Determining how much vehicle tax you must pay in Germany is not easy. It depends on several factors, particularly engine displacement and emissions.

Factors influencing the amount of transport tax:

• The type of vehicle and year of manufacture.
• The engine type: petrol or diesel.
• The amount of CO² (carbon dioxide) emitted into the atmosphere. All vehicles in Germany are categorised into emission classes from Euro 1 to Euro 6.
• Engine displacement.

Owners pay the least tax on small petrol cars. For example, a car with a 1400cc petrol engine and a CO² emission of 90 g/km is taxed at €30 per year. A BMW X5 with a three-litre six-cylinder engine and emissions of 190 g/km costs €250 a year.

Diesel-powered cars with the same characteristics as petrol-powered cars are subject to a significantly higher tax: you will generally have to pay twice as much. Hybrid vehicles are one-half as expensive due to their low CO² emissions.

The tax amount for electric cars, trailers and trucks is calculated based on the weight of the vehicle; if the vehicle is heavier than 3,500 kilos, the volume of harmful emissions is also taken into account. Electric cars weighing over 3.5 tons are subject to a levy of €60. The less the vehicle weighs, the less tax amount is due. At the same time, owners of electric cars in Germany are exempt from the vehicle tax for five years after the first registration of the car.

Owners of heavy transporters used for cargo shipping pay LKW-MAUT, a German road tax. This tax is levied for every kilometre travelled on certain routes. The minimum weight of a heavy vehicle for paying the tax is 7.5 tons. The tax is paid for all heavy transporters that exceed this weight. The charge ranges from €0.12 to €0.24 per km, depending on the distance travelled, the number of axles of the heavy transporter and its emission class.

German vehicle tax calculator

Most cars in Germany are in the Euro 3 class and above. Thus, a petrol-powered car, if first registered before 30 June 2009, is taxed at €6.7 per 100cc of engine volume. However, if it has a diesel engine, a much higher rate of €15.4 must be paid.

For newer vehicles, the tax rate is lower. If the car is registered for the first time after 1 July 2009, the total rate will be €2 per 100cc for petrol engines and €9.5 for diesel engines.

However, the total rate is supplemented by an additional CO² emission rate of €2 per 100cc for every extra g/km. The amount of emissions produced can be found in the vehicle’s technical documentation. In 2021, the non-taxable emission limit is 120 g/km. This is typical for green cars such as Toyota Prius.

For example, BMW X5 with a 3.0L diesel engine produces 162 g/km of emissions, meaning, a surcharge of €134 must be paid for exceeding the standard. Volkswagen Passat, on the other hand, with its 1.4L petrol engine, produces 145g/km of emissions, so the surcharge is €100. This is how the German authorities encourage car owners to switch to newer and more environmentally friendly cars.

How to pay German vehicle tax

To pay the vehicle tax when registering your car, you must indicate your German bank account number. Within two weeks of registration, the customs office will send you a tax assessment with the amount of the charge and the date of payment. The letter will also include a telephone number you can call to clarify any questions you may have. You can find out which office serves your area of residence on the German Customs website.

The amount of the tax assessment will remain valid in subsequent years. The tax assessment will be carried out again if the tax base or rate changes or in the event of the tax exemption.

In a couple of weeks, the customs office will debit the lump sum from your account for one year in advance. The fee will then be deducted annually from this account, so you should inform the customs office if you close it or open a new one.

If the car is deregistered when you sell it, you do not need to inform the customs office. The customs office will recalculate the amount according to the actual dates of ownership of the car and refund the balance, usually within three weeks. You will get a letter stating the amount of the refund a couple of weeks later.

Tax on vehicle sales in Germany

When selling a car in Germany, you must pay a Value Added Tax (VAT) or Mehrwertsteuer (MwSt). VAT of 19% is added to the netto price of the car, thus, making up the full price – brutto. The buyer pays the seller the VAT amount in addition to the price of the car, and the seller pays it back to the state as tax.

If a car is bought for export outside the EU, 19% VAT must also be paid. The buyer is entitled to a VAT refund if the car is bought from a legal entity. If the car is sold by a natural person, VAT is not refundable.

Author: Ani Muradyan