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Motor vehicle tax

Motor vehicle tax is payable on the upkeep of vehicles for use on public roads, irrespective of the actual extent of such use. The term ‘vehicles’ includes motor vehicles and trailers as described in the Vehicle Licensing Regulations.

Who is liable for tax?

As a rule, motor vehicle tax for vehicles registered in Germany is payable by the person in whose name it is registered to for road use. Liability for tax usually begins when the vehicle is registered and ceases when it is taken out of service under road traffic law, which involves contacting the registration authority.

How much is the tax?

New passenger cars registered on or after 1 July 2009 are taxed primarily on the basis of co2 emissions, using the following components:

  • A base rate related to engine capacity, with a distinction made between positive-ignition, petrol engines and compression ignition, diesel engines,

Plus

  • An amount based on co2 emissions, calculated by applying a flat rate of tax per gram to the car’s certified co2 rating per kilometre, with part remaining tax-free

The first component of the tax, base rate, is higher for diesel cars than for petrol cars to compensate for the fact that the former benefit from more favourable treatment as regards energy duty. The rating for each car is set by the vehicle registration authorities co2. It is stated in the register of vehicles and on the vehicles own registration certificate. The part of this rating that remains untaxed was reduced for new vehicles registered on or after 1 January 2012 and will be further reduced in 2014.

Purely electric vehicles, which are propelled exclusively using electric motors powered entirely or primarily by mechanical or electrochemical energy storage devices or by zero-emission power converters, are exempt from tax for 10 years beginning on the date of their first registration.

Overview of motor vehicle tax on cars

Information about new cars registered before 1 July 2009 and an interactive calculator for motor vehicle tax are available (in German) on the Federal Ministry of Finance’s website (www.bundesfinanz- ministerium.de).

The annual tax payable for motorbikes requiring registration is €1.84 per 25cm3 of engine capacity, or fraction thereof. The tax to be paid for motor homes is based on the maximum permissible weight and pollutant emissions, using the EU’s emissions standards. For vehicles in the separate legal category of three-wheeled and light four wheeled motor vehicles, including trikes and quad bikes, the tax is calculated on the basis of engine capacity and the applicable EU emissions standard.

  • As well as new cars registered between 5 November 2008 and 30 June 2009 are subject to the co2-based motor vehicle tax if this tax rate proves more favourable
  • Powered entirely or primarily by batteries or flywheel systems, electrochemical or mechanical energy storage devices, or by fuel cells (zero-emission power converters)
  • Exemption period is calculated to the exact date based on the annual tax for the car. A grandfathering provision also applies.
  • The higher tax rate for diesel cars compensates for the lower energy duty rate on diesel fuel compared with petrol.

Other motor vehicles with a maximum permissible weight of up to 3.5 tonnes are taxed purely according to their weight.

There are four emissions based categories for HGV’s (heavy goods vehicles) that are ordered by maximum permissible weight in 200kg steps. Motor vehicle tax law gives priority to the pollutant emissions category as defined in the Road Traffic Registration Regulations.

The maximum annual tax payable for the different categories is as follows:

  • Pollutant emissions category S2 or better €556
  • Pollutant emissions category S1 €914
  • Noise category G1 €1,425
  • Other €1,681

If any vehicle described above is a pure electric vehicle, it is taxed on the basis of its maximum permissible weight, with a 50% discount.

Vehicle trailers are subject to a linear tax schedule, with €7.46 being charged for each 200kg of the maximum permissible weight, or fraction thereof; the tax is capped at €373.24.

Exemptions from motor vehicle tax apply, for example, to all vehicles excepted from the regulations on the registration procedure; vehicles in the service of Germany’s armed forces, police and customs; and vehicles used exclusively for purposes dictated by law (e.g., fire fighting, patient transport and disaster response). The law also contains concessions for motor vehicles kept by severely disabled persons.

The keeper of the vehicle will receive written notification of the amount of motor vehicle tax assessed as being payable; this assessment is valid until further notice. The tax is generally payable in advance for a given year. If more than €500 in tax is due in a year, it can be paid in equal half-yearly instalments, but carries a 3% surcharge. If more than €1,000 is due for the year, the amount may be split into equal quarterly payments, but this carries a 6% surcharge. A new notice is issued to the vehicle’s keeper only if the assessment is changed. If a person’s tax liability ceases, the tax for the final period is calculated precisely to the last day. Any excess tax paid is refunded. The minimum length of time for which vehicles registered in Germany can incur tax is one month.

What is the legal basis for motor vehicle tax?

The main legal bases are the Motor Vehicle Tax Act and the associated Motor Vehicle Tax Implementing Ordinance.

Who collects the tax?

Motor vehicle tax has been a federal tax since 1 July 2009. The Federal Ministry of Finance is responsible for administration of the tax, and will continue for some time to rely on the revenue authorities of the Länder for assistance. The latter are deemed to be federal revenue authorities when acting in this capacity. This means that the tax office will retain their local responsibility as points of contact for the tax until 30 June 2014.

An amendment was made to the Basic Law to give the Federation both responsibility for the administration of motor vehicle tax and the right to the revenue as of 1 July 2009. Since then, receipts from motor vehicle tax have accrued to the federal budget as general revenue not earmarked for any specific purpose. As compensation, the Länder receive a certain amount each year from the Federation’s revenue. This amount is set by law.

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