Germany Motor Vehicle Tax Guide (Kfz-Steuer 2026)
A comprehensive guide to German motor vehicle tax (Kraftfahrzeugsteuer — Kfz-Steuer), calculated from CO₂ emissions (€2–€4 per g/km) and engine displacement (€2/100cc petrol, €9.50/100cc diesel), with a 10-year tax exemption for electric vehicles and reduced rates for plug-in hybrids.
Kfz-Steuer (vehicle tax) is an annual tax levied on all motor vehicles registered in Germany. It is collected by the Zoll (German customs) rather than the Finanzamt. The tax is calculated based on a combination of CO₂ emissions and engine displacement, with significant discounts for low-emission and electric vehicles. For related reading, see our VAT Guide → and Business Expenses Guide → (for claiming vehicle costs).
How Kfz-Steuer Is Calculated (2026)
- CO₂-based component (CO₂-Komponente): For each g/km of CO₂ above the tax-free threshold, you pay €2–€4 per g/km. The first 95 g/km (petrol) or 115 g/km (diesel) are still taxed at lower rates, but the tax-free allowance of 95 g/km was gradually reduced to 0 g/km as of 2021 — meaning all CO₂ emissions are now taxable. The rate is €2/g/km for the first 140 g/km and €4/g/km above 140 g/km from 2024.
- Engine displacement component (Hubraum-Komponente): Based on cubic capacity (Hubraum in ccm). For petrol engines: €2.00 per 100cc. For diesel engines: €9.50 per 100cc. This makes diesel significantly more expensive to tax — a 2,000cc diesel car pays €190/year just on displacement, vs €40 for a petrol car with the same engine size.
- Diesel surcharge: The higher displacement rate for diesel reflects its higher particulate emissions. Modern diesel cars with Euro 6d emissions standards still pay the higher displacement rate.
- Average annual cost: A typical 1,600cc petrol car (120 g/km CO₂) pays approximately €120–€180 per year. A similar diesel pays €300–€400 per year. Large SUVs can cost €500+ annually.
Electric Vehicles, Hybrids, and Payment
- Electric vehicles (Elektrofahrzeuge): EVs registered between 2011 and 2030 benefit from a 10-year tax exemption (Kfz-Steuer-Befreiung). After the exemption period, they pay a reduced rate based on vehicle weight (not CO₂ or displacement). EVs registered after 2030 will pay the reduced weight-based rate from the start.
- Plug-in hybrids (Hybrid-Elektrofahrzeuge): Qualify for reduced rates if they meet minimum electric range requirements (at least 40km electric range and CO₂ ≤ 50 g/km). The reduced rate applies through 2030.
- Payment and administration: Kfz-Steuer is paid annually via direct debit (Lastschrift) or bank transfer. The Zoll (Hauptzollamt) sends the tax assessment (Steuerbescheid). The tax is calculated at first registration and automatically adjusted if the vehicle is modified. Late payment incurs a Säumniszuschlag of 1% per month on the unpaid amount.