Walkthrough of the annual levy as it applies now — the formula, the brackets above 95 g/km, the BEV relief, and how to read the number on your customs-office notice.

After you register, the regional customs office sends you a single tax notice (Kfz-Steuerbescheid) and then quietly debits the tax from your account, usually a few hundred euro. It repeats itself every year on the same date for as long as you own the machine, normally without a new notice. Most expats pay without ever really understanding how the figure got there.

That is a mistake. The Kfz-Steuer is calculated from a published formula, and once you see the formula you can usually predict the exact number before signing anything at the dealership. It matters when comparing a 2018 TDI against a 2024 petrol hatchback, or wondering whether a BEV replacement is worth the price gap.

What is this levy and who actually collects it?

Kfz-Steuer, short for Kraftfahrzeugsteuer, is the annual federal levy every registered car in the country pays for the right to use public roads. The legal basis sits in the Kraftfahrzeugsteuergesetz (KraftStG). Since 1 July 2014 the Hauptzollamt — the regional customs office — has handled every step: calculation, billing, collection, and enforcement.

How is car tax calculated for a combustion passenger car?

Two numbers. The formula adds a baseline figure for engine capacity to a surcharge for every unit above the 95-g/km allowance. The customs office rounds up the engine size to the next full 100 cm³, so a 1,395 cm³ motor is treated as if it were 1,400. Multiply by the rate for your fuel type. On top of that the CO2 emissions portion adds. For cars first registered from 1 January 2021, every unit above 95 g/km costs between €2,00 and €4,00 depending on which bracket the reading falls into. Cars first registered between 1 July 2009 and 31 December 2020 pay a flat €2,00 per g/km above the threshold (120 g/km for first registrations up to 2011, 110 g/km for 2012–2013, 95 g/km from 2014). Cars first registered before 1 July 2009 pay by engine size and emission class only, with no CO2 part and at higher rates per 100 cm³.

Base rates by engine type: gasoline vs. TDI vs. alternative fuels

For a Benzin engine (gasoline) the rate is €2,00 per 100 cm³. Diesel engines pay €9,50 per 100 cm³. Alternative-fuel machines running LPG or CNG use the €2,00 rate.

PROPULSION RATE PER 100 CM³ TYPICAL EXAMPLE
Gasoline €2,00 1.5 TSI, 1,498 cm³ → €30/yr base
Diesel €9,50 2.0 TDI, 1,968 cm³ → €190/yr base
LPG / CNG €2,00 1.0 bi-fuel, 999 cm³ → €20/yr base
H-Kennzeichen (classic plate) Flat €191,73 Cars on an H-plate or red 07 plate (motorcycles €46,02)

Source: § 8 & § 9 KraftStG, current version

CO2 surcharge brackets: what changed for vehicles registered from 2021

For passenger cars registered from 1 January 2021, a six-bracket surcharge schedule applies. Each bracket applies only to the unit that falls within it — the same way income-tax marginal rates work.

CO2 RANGE (G/KM) RATE PER GRAM
95 — 115 €2,00
116 — 135 €2,20
136 — 155 €2,50
156 — 175 €2,90
176 — 195 €3,40
Above 195 €4,00

Source: § 9 Abs. 1 Nr. 2 of the statute, reform effective January 2021

Are electric vehicles entirely free of this bill?

For a limited time, yes. Battery-electric cars first registered between 18 May 2011 and 31 December 2030 are exempt from tax for ten years from first registration, but no later than 31 December 2035 (§ 3d KraftStG, as amended by the Eighth Act amending the Kraftfahrzeugsteuergesetz, in force since 1 January 2026). The extension applies to cars already on the road too: a BEV registered in 2022, for example, is now exempt until 2032. The exemption stays with the vehicle, so a new owner gets the remaining period. Afterwards the car pays the weight-based tax for electric vehicles.

A worked example: calculate car tax step-by-step

Example for a car first registered after 1 January 2021: 2023 Volkswagen Golf VIII 2.0 TDI Style 150 PS: displacement 1,968 cm³, reading 127 g/km. Displacement portion: 1,968 rounds to 2,000 cm³ = 20 × €9,50 = €190,00. Surcharge: 127 − 95 = 32 units. First 20 at €2,00 = €40,00. Next 12 at €2,20 = €26,40. Annual total: €256,40.

Key takeaways

  • The formula combines a per-100-cm³ figure (€2,00 gasoline, €9,50 diesel) with a surcharge for every unit above 95 g/km.
  • Six progressive brackets apply for cars first registered from 2021; earlier cars pay a flat €2,00 per g/km (from July 2009) or no CO2 part at all (before July 2009).
  • Pure BEVs first registered by 31 December 2030 are exempt for ten years, at the latest until 31 December 2035 (§ 3d KraftStG).
  • Cars on an H-Kennzeichen pay €191,73 flat annually.
  • The tax is debited by SEPA direct debit one year in advance, starting on the day the car is registered to you, and then on the same date every year.

Sources & methodology

  • Kraftfahrzeugsteuergesetz § 8 and § 9, current consolidated version.
  • Zoll (Generalzolldirektion) — official reference guide for passenger-machine levies.
  • ADAC — online tool and reference materials.