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Audi halts Hungarian investments on new tax

 

Audi AG, Volkswagen AG's luxury brand, has suspended future investments in Hungary because of a new tax, Népszabadság reported, citing a company executive. Audi, which employs 5,200 people at its plant in Győr, western Hungary, has spent Euro 3 billion ($3.8 billion) on production in the country, the newspaper said. Audi is now seeking other locations in central and east Europe for future investments after Hungary introduced a so-called solidarity tax, Népszabadság said, citing Thomas Faustmann, managing director of Audi's Győr plant. The German company has been granted a tax holiday in Hungary until 2011 in Hungary, Népszabadság said. Talks with the government over the new solidarity tax, which would decrease the company's competitiveness compared with its plants in Poland and China, had no results, the newspaper said, citing Faustmann. Hungary's Economy Ministry expects Audi to complete investments worth 160 billion forint in Hungary, Népszabadság reported. (Bloomberg)