How to Calculate Car Tax

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When buying a car, you will have to pay a mandatory car tax. This tax is typically payable on a once-a-year basis. But just how much car tax can one expect to pay? CARFAX takes a look at the various ways to calculate car tax in Europe.

Elements Used in Calculating Car Tax

There are a lot of factors involved and each country within Europe focuses on different aspects in creating their calculation for car tax. Here is a list of the most common elements used in calculating car tax:

  • Engine size (Cylinder capacity)
  • Horsepower
  • Kilowatts
  • CO2 emissions
  • Weight

In some cases, a country will use more than one element in their calculation. As a general rule, it is safe to assume that “greener” vehicles are favored by most car tax systems across Europe.

car taxes

Car Tax for the First Year: Registration Tax

Car tax for the first year is called registration tax and it is a one-time duty that is made at the time of purchasing a vehicle. Shoppers can typically expect to pay value added tax (VAT), registration tax, and registration fees on top of the cost of the vehicle. While each European country has different rules in place for registration tax, some generalizations can be made:

Higher than Average Registration Tax:

  • Denmark (105% of DKK 80,500 + 180% on the remainder)
  • Netherlands (Based on price + CO2 emissions)
  • Greece (Based on cc + exhaust emissions 5% ‐ 50% — Luxury tax up to 40%)
  • Malta (Based on price, CO2 emissions, vehicle length)
  • Finland (Based on price + CO2 emissions Min. 5%, max. 50%)

Lower Registration Tax / Fee (Less than €100):

  • Romania (Based on cc + exhaust emissions + CO2)
  • United Kingdom (Based on CO2)
  • Luxembourg (Fixed Fee)
  • Bulgaria (Fixed Fee)
  • Slovakia (Fixed Fee)
  • Czech Republic (Fixed Fee)
  • Germany (Fixed Fee)
  • Lithuania (Fixed Fee)

Some countries, like Sweden, have no registration tax upon acquisition of a vehicle.

Car Tax After the First Year: Ownership Tax

Ownership tax, also referred to as circulation or road tax, is periodically charged beginning the first year after you register your vehicle. As with the registration tax, countries within the EU have different ways of calculating this car tax.

Higher than Average Ownership Tax:

  • Netherlands (Based on CO2 emissions/ Weight x days)
  • Denmark (Based on Fuel consumption, weight)
  • Austria (Based on Kilowatt)
  • Bulgaria (Based on Kilowatt)
  • Italy (Based on Kilowatt, CO2 emissions)

On the other hand, the ownership tax in the following countries is less than €100 per year:

Less Than €100 / Year Car Tax
SE HU PL*
LU CZ* SK*
LV EE* SL*
RO LT* UK

* No Ownership Car Tax for Private Vehicles

Using the CARFAX Vehicle History Report to Help Estimate Car Tax

As mentioned previously, car tax is generally calculated based on the unique specifications of your particular vehicle. While in some cases (brand new cars, for example) it may be easy to learn all the specifications about your car, used cars can be a different story. The CARFAX Vehicle History Report provides used car buyers with detailed vehicle information which can help determine your car tax costs. On top of this, if your car has any history in the United States, the CARFAX Report will also help uncover any potential negative history, which can save you time and money down the road.