Russia Tells Executives Paying Bribes Abroad Isn’t Deductible

Russia, the world’s most corrupt major economy, issued a statement telling executives that they can’t claim tax deductions at home for bribes paid abroad.

“Expenses incurred while committing legal violations, including providing bribes or kickbacks, are not recognized for the purposes of tax assessment,” the Finance Ministry said in a statement posted on its website yesterday.

The ministry’s press service declined to comment on the statement immediately today.

The issuance of the statement is related to Russia’s obligations under the Organization for Economic Cooperation and Development’s Anti-Bribery Convention, not in response to a request from a specific company, the Vedomosti newspaper reported today, citing an unidentified ministry official.

Russia joined the Anti-Bribery Convention in February and officially became the 39th signatory in April, according to the OECD’s website.

Russia ranks alongside Nigeria at 143rd of 182 countries in Berlin-based Transparency International’s 2011 Corruption Perceptions Index, making it the most corrupt member of the Group of 20 countries.

To contact the editor responsible for this story: Scott Rose at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net