Directed by Maren Ade, Toni Erdmann premiered at the Cannes Film Festival and is Germany's official candidate for next year's foreign film Oscar.
American coming-of-age story Moonlight and adult drama Elle came next in Sight & Sound's Films of the Year poll.
Last year's winner was The Assassin, by Taiwanese director Hou Hsiao-Hsien.
Toni Erdmann, which will be released in the UK on 3 February, is one of three films with female directors to make this year's top five.
The others are Certain Women, a triptych of tales from US director Kelly Reichardt, and Andrea Arnold's road movie American Honey.
Nick James, Sight & Sound's editor, expressed delight that the poll "recognises the talent of women directors at the top of the art form".
Ken Loach's I, Daniel Blake, which won the veteran British film-maker his second Palme d'Or at Cannes, came sixth in the poll.
Oscar-tipped Manchester by the Sea - named the National Board of Review's best film of 2016 earlier this week - is ranked seventh.
According to the British Film Institute (BFI), publisher of Sight & Sound, the results represent "a small triumph for diversity".
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A German comedy about a father trying to reconnect with his adult daughter has been named the best film of 2016 in a poll of 163 critics.