A pledge from Turkey for a change in the special consumer tax system at a specific date in the future would reportedly be enough to convince Volkswagen to choose the country over Bulgaria as the location for a €1bn multi-brand auto production plant, write bne InelliNews

The company is holding talks with officials in Ankara over Turkey’s tax regime, which charges at least 45 percent tax on vehicles with engines of 1600cc and 100-110 percent on 2000cc cars, Reuters said on Thursday.

Volkswagen said last month it has made no decision about where to locate the new factory, but sources who spoke with Reuters said it is positive about investing in Turkey and was close to doing so.

“The only standing request VW has is on taxation on the vehicle market,” one source said. Turkey is trying to come up with a formula that will meet Volkswagen’s concerns while not putting existing car producers at a disadvantage, the source said.

Vehicles with engines of less than 1,600cc constituted 96 percent of all car sales last year, Reuters said.

Volkswagen has also been looking at establishing the new production facility in Bulgaria, but is close to finalizing the Turkey deal, the sources said.

“Even if it is not implemented immediately, a pledge for change (in the tax system) at a specific date in the future would be enough. They are planning to convey this request to the Turkish president. A final decision will materialize shortly,” one of the sources said, according to Reuters.