Connect the test lamp to terminal 1 of the ignition coil and to ground. The lamp will light when the ignition is activated.
Turn on the ignition. Turn the crankshaft by the V-belt until the corresponding ignition groove (see table) on the V-belt pulley coincides with the joint of the engine block halves and so that the distributor runner points to the 1st cylinder mark on the edge of the distributor housing.
Loosen the distributor clamp bolt.
If the lamp does not light when the groove of the V-belt pulley coincides with the joint of the engine block halves and with the corresponding position of the movable contact of the distributor runner, then you need to turn the distributor clockwise until the breaker contact closes. Then slowly turn the distributor to the left until the contact begins to open and the lamp lights up.
Tighten the distributor clamp bolt and recheck the ignition timing.
The ignition timing is set correctly if, when the crankshaft is slowly rotating in the working direction, the lamp lights up exactly at the moment when the corresponding groove on the V-belt pulley coincides with the joint of the engine block and the moving contact of the distributor rotor is directed towards the mark on the edge of the distributor housing.
Attention! Adjusting the ignition timing using the test lamp is auxiliary. After such adjustment, the torque setting must be rechecked at the first opportunity using a stroboscope.
Replace the distributor cap.
The information is posted on this website [VWmanual]

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