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Report: Volkswagen in talks with Turkey over vehicle tax ahead of €1B plant deal

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Report: Volkswagen in talks with Turkey over vehicle tax ahead of €1B plant deal

Volkswagen AG is in discussions with Turkish government officials over vehicle taxes as it seeks to finalize a €1 billion assembly plant in the country, Reuters reported Aug. 29, citing sources familiar with the matter.

The German automaker is about to close a deal to build a multibrand assembly plant in Turkey, but the tax issue remains unresolved, the newswire said. Sources reportedly did not disclose what assurances Volkswagen is looking to secure on vehicle tax.

According to the report, the government is trying to come up with a tax formula that will not put existing carmakers at a disadvantage.

Turkey imposes a special consumption tax on auto purchases, which can range from 45% to 60% for engines up to 1.6 liters and 100% to 110% for engines up to 2 liters, Reuters said.

The carmaker has not yet determined the location of the proposed assembly plant, the report added.

Volkswagen did not immediately respond to S&P Global Market Intelligence's request for comment.