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 yearly customs-office notice.

Your first annual bill arrives by post, printed on a beige envelope from the regional customs office, and quietly takes a few hundred euro out of your account. Then it repeats itself every year for as long as you own the machine. 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 every unit above 95 g/km you owe between €2,00 and €4,00 depending on which bracket the reading falls into.

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 Dacia bi-fuel → €32/yr base
Classic plate Flat €191,73 Any historic vehicle

Source: § 8 & § 9 of the statute, current version; ADAC reference, April 2026

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?

Yes — fully. Battery-only machines first registered between 18 May 2011 and 31 December 2025 are exempt from tax for ten full years, capped at 31 December 2030. The 2025 Autogipfel extended the Steuerbefreiung to 31 December 2035 for new BEVs.

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

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 registered from 2021.
  • Pure BEVs registered by 31 December 2025 are free for ten years; extended to 2035 by the 2025 Autogipfel.
  • Classic-plate machines pay €191,73 flat annually.
  • Payment runs via direct debit pulled on the first-registration anniversary.

Sources & methodology

  • Kraftfahrzeugsteuergesetz § 8 and § 9, current consolidated version.
  • Zoll (Generalzolldirektion) — official reference guide for passenger-machine levies.
  • ADAC — online tool and reference materials, updated January 2026.