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Guide for Traders: Car Taxes in Germany

Guide for Traders: Car Taxes in Germany

Get to know the German car taxes so that your used car dealership can stay compliant with regulations and price vehicles accurately.

Traders dealing in used vehicles have to constantly navigate all the legal and financial aspects of the business to stay compliant. After all, you can only turn a profit if you understand the taxes and fees that impact each sale.

Knowing how to handle car taxes in Germany not only keeps you compliant but also helps build trust with customers—whether they’re private buyers, other dealerships, or fleet clients.

So, let’s see the essential car taxes in Germany that you need to be aware of.

Car taxes in Germany

There are three crucial taxes to take care of when buying or importing cars into Germany, and these are:

Motor Vehicle Tax (Kfz-Steuer)
VAT for imported cars
Emission Badges (Umweltplakette)

We’ll now see more about each one.

Motor Vehicle Tax (Kfz-Steuer)

The German Motor Vehicle Tax is called Die Kraftfahrzeugsteuer, often referred to as Kfz-Steuer. Vehicle owners pay this tax annually.

The amount you’ll pay isn’t fixed; it depends on factors like:

The vehicle’s engine capacity
Fuel type
CO₂ emissions.

For instance, petrol cars are charged €2.00 for every 100cc, while diesel vehicles are taxed at €9.50 per 100cc. On top of that, if CO₂ emissions go over certain limits, there are extra fees.

VAT for imported cars

Like in all EU countries, you’ll have to pay Value Added Tax (VAT) when importing cars into Germany.

The standard VAT rate in Germany is 19%.

As a used car dealer, you’ll have to be careful and always check if VAT is already included in the purchase price of the car you’re buying for your dealership. If it’s not, you’ll have to declare the car and pay a 19% VAT when bringing it into Germany.

For cars coming from outside the EU, there’s also an import duty, usually 10% of the car’s value, on top of the VAT. To make sure you’re covering all bases with import duties and VAT, it’s a good idea to check with a tax professional or German customs.

Emission Badges (Umweltplakette)

Germany has established low-emission zones in many cities to cut down on pollution. To drive in these areas, cars need an emission badge, called the Umweltplakette.

So, although emissions badges aren’t exactly taxes, they’re still an expense you have to account for. The badge shows a car’s emission level and is required to enter low-emission areas. If you don’t have the right badge, you could get fined.

You can buy the Umweltplakette at the following vehicle inspection organizations:

The prices will vary, but they’re generally in the range from €6.00 to €20.00.

How to calculate car tax in Germany?

Although the car tax isn’t fixed, you can still calculate it upfront to avoid surprises. Here’s how the tax calculation works depending on the car’s registration date.

You can find a comprehensive breakdown here, and we’ll provide the summary below.

For cars registered before 31.08.2018

There’s a CO₂ allowance that varies by registration year: 120 g/km in 2011, 110 g/km in 2013, and 95 g/km in 2014.
Tax: €2.00 for each gram of CO₂ above the allowance.

For cars registered between 01.09.2018 and 31.12.2020

CO₂ allowance: 95 g/km.
Tax: €2.00 for each gram of CO₂ above 95 g/km, calculated using the WLTP (a new testing standard for emissions).

For cars registered from 01.01.2021 onwards

The tax rate goes up with higher CO₂ emissions:
- 95 – 115 g/km: €2.00 per gram.
- 115 – 135 g/km: €2.20 per gram.
- 135 – 155 g/km: €2.50 per gram.
- 155 – 175 g/km: €2.90 per gram.
- 175 – 195 g/km: €3.40 per gram.
- Over 195 g/km: €4.00 per gram.

In short, cars with higher emissions registered from 2021 onwards pay more tax per gram of CO₂, which encourages buyers to go for lower-emission vehicles.

Motor vehicle tax rates for different vehicle types

Emissions and registration dates aren’t the only criteria that determine the motor vehicle tax in Germany.

The vehicle type also plays a role, and each category has its own specific tax rules. We’ll focus on electric vehicles, light commercial vehicles, and motorcycles, as European used vehicle dealers trade these the most frequently.

Electric vehicles

Electric cars registered between 2016 and 2025 are generally exempt from motor vehicle tax for the first ten years.

❗This exemption is only valid until 2030 at the latest, even if a car was registered closer to that date.

So, if you register a car in 2025, the exemption will still end in 2030 rather than lasting a full ten years. After 2030, electric vehicles will be taxed based on their total weight but at a reduced rate, which is 50% lower than the rate for traditional vehicles.

This reduction makes electric cars a more affordable, eco-friendly choice in the long run.

Light commercial vehicles

When it comes to light commercial vehicles (LCVs) up to 3,5 tons, Germany calculates the motor vehicle tax based on the vehicle’s weight, not emissions like with passenger cars. Because of that, LCV taxes tend to be lower.

Motorcycles

Motorcycle tax is calculated based on engine capacity. Light motorcycles up to 125cc are exempt from tax, while larger motorcycles are taxed at €1.84 per 25cc.

Other financial considerations for car traders

Now you’ve seen what you can expect when paying the Motor Vehicle Tax (Kfz-Steuer), VAT for imported cars, and Emission Badges (Umweltplakette).

However, as a used car trader, there are a few other costs to consider when setting your pricing:

Toll charges: these apply to certain vehicles, especially heavy ones, when using German highways.
Customs duties: applied to non-EU imports.
Company car tax: if you’re selling to other businesses, keep in mind that many business clients may need cars for employees’ private use, which counts as a taxable benefit.

With all these costs in mind, you’ll be able to set your pricing more accurately and ensure you cover all necessary expenses, making your business both competitive and compliant with German regulations.