Car tax – everything you need to know about motor vehicle tax

On 1 January 2025, the Motor Vehicle Tax Act entered into force in Estonia. This act makes the motor vehicle tax or car tax compulsory for all owners or responsible users of motor vehicles registered in the road register. The car tax aims to reduce transport’s negative environmental impact and fill the budget deficit.

The car tax consists of an annual tax, administered by the Tax and Customs Board, and a registration fee, collected by the Transport Board.

Annual tax

An annual tax is payable on all vehicles registered in the road register, but the rate depends on several factors. The annual tax for passenger cars consists of a basic, mass, and specific CO2 emissions tax. In the case of vans, it consists of the base and CO2 emissions components, and in the case of motorcycles, it is based on engine capacity. For passenger cars and vans, the annual tax rate also depends on the age of the vehicle. The basic amount is €50.

The car tax is payable by the vehicle’s owner on 1 January. If the owner changes ownership of a car during the year, the tax is not refunded to the previous owner, and the amount of the tax is not reduced. The person who owns the vehicle on 1 January of the following year pays the subsequent annual tax. The car tax is also not refunded if the vehicle is stolen, destroyed, scrapped or deleted from the vehicle register.

Fifty per cent of the car tax is payable by 15 June and 50 per cent by 15 December.

The object of the annual motor vehicle tax is:

• Motor vehicle registered in the vehicle register (from 01.01.2025);
• Motor vehicle with suspended registration (from 01.01.2027).

Vehicles subject to the annual circulation tax:

• Passenger cars (category M1 and its subcategories);
• Motorcycles and mopeds (categories L3e, L4e, L5e, L6e and L7e and subcategories);
• vans (category N1 and subcategories);
• off-road vehicles (category MS2);
• wheeled tractors (motor vehicle categories T1b,T3 and T5).

Vehicles with suspended registration and vehicles temporarily withdrawn from the register

Vehicles temporarily deleted from the road register as of 01.01.2025 or whose registration was suspended will not automatically be subject to the annual tax. If, during the year, the temporary deletion of the vehicle concerned is reinstated or the suspension of the registration is lifted, i.e. the registration cover is reinstated, the annual tax will be calculated pro rata to the number of days remaining until the end of the current tax period, starting from the day following the day on which the vehicle is taken back into circulation.

There will be a two-year transitional period from 01.01.2025 to 31.12.2026 for the definitive deregistration of vehicles with a suspended entry or phantom vehicles (whose existence is unknown). During this period, they will not be subject to vehicle tax, and persons can deregister them.

In 2025, the owner of a vehicle with an unknown missing or illegally dismantled suspended entry will be able to delete it from the register free of charge. According to the draft law, deleting such a vehicle will cost the owner €15 in 2026 and €80 from 2027. However, vehicles with a suspended registration will be subject to a vehicle tax as of 1 January 2027.

From 1 October 2026, all vehicles whose registration has been suspended for at least 7 years will be automatically deregistered. If this is not desired, the vehicle’s registration must be reinstated before 1 October 2026 and, if desired, temporarily deregistered. From January 2025, vehicles with a suspended registration cannot be registered—this legislation will disappear from the Road Traffic Act.

Car wrecks that are no longer needed will have to be taken to a licensed dismantling facility, which will remove the vehicle from the register when it is dismantled, and no registration fee will have to be paid for such a vehicle.

Please note! The Ministry of Climate Change is organising a nationwide collection campaign for end-of-life vehicles from 12 May to 16 June, where a waste collector will pick up the car free of charge. Scrap vehicles will be picked up no matter how far away the vehicle is (including islands) or its condition. Partially dismantled cars and vehicles not in your name can also be handed in.

Registration fee

The registration fee is payable upon the first registration of a passenger car (category M1 motor vehicle) and a lorry with a gross vehicle weight of up to 3500 kg (category N1 motor vehicle). The fee must be paid once for each vehicle, including on the first change of ownership of a vehicle already registered after 1 January 2025 if no registration fee has been paid for the vehicle before. 

The registration fee is payable by the person who registers the vehicle and the paid registration fee is a prerequisite for registration. The registration fee must therefore be paid in one instalment, but in the case of leasing it can be added to the car’s purchase price. The registration fee is composed of a basic part, a CO2 specific emissions part, a mass part, and the vehicle’s age also influences the fee amount. Compared to the annual fee, the registration fee has a higher CO2 emissions component to encourage the purchase of less polluting vehicles.

No registration fee

• when the lessee buys the vehicle from the leasing company and registers it in his name;
• when registering a car received as inheritance.

Refund of the registration fee

Refunds of registration fees can be claimed for vehicles up to 10 years old that are taken out of Estonia, but please note that:

• the application must be submitted within 60 days of the vehicle’s removal from the register;
• if the vehicle is deleted from the road register before the expiry of a period of one year from the date of the first registration of the car, the basic registration fee valid at the time of registration of the car in the Estonian road register will not be refunded;
• if the age of the car to be deregistered is less than 10 years and more than 1 year, the amount of the registration fee to be refunded shall be equal to the amount of the registration fee calculated on the date of deregistration of the vehicle from the register, according to the registration fee rates in force at the time of payment;
• registration fees of less than €300 will not be refunded.

The refund of the registration fee can be applied for from 01.07.2025.

Exemption from annual fee and registration fee:

• alarm vehicles;
• diplomatic vehicles;
• diplomatic and diplomatic service vehicles, diplomatic service vehicles, certain defence-related vehicles.

The annual vehicle tax and registration fee can be calculated using the Transport Board’s vehicle tax calculator.

You can contact the Transport Administration at info@transpordiamet.ee if you have any further questions.