The purpose of describing the limits of state laws in the area of tax deductibility of bribes is to ensure that the focus remains on improving the situation. Regardless of the type of legal or administrative loophole that allows bribes from a foreign official to be deducted, the practice must be eliminated. In his remarks at the Carter Center conference on May 3, 1999, Treasury Secretary Robert Rubin called the fact that some countries have not yet eliminated the tax deductibility of bribes «simply inexcusable.» Monitoring must continue to ensure the full implementation of the OECD Recommendation against the tax deductibility of bribes. Croatia prohibits the tax deduction of bribes under a number of provisions of the Income Tax Act. However, the 2009 Anti-Corruption Recommendation calls for an explicit and legally binding provision on the non-deductibility of bribes. In order to strengthen its framework on bribery of foreigners, Croatia could consider adopting such legislation. Lobbying expenses include all payments made to support a political candidate or campaign, or to influence a legislative body in passing or rejecting laws. They also cover the cost of attempts to influence the official actions or views of members of the executive branches of government. If a company launches an advertising campaign or tries to influence how people vote in referendums or elections, these costs are also non-deductible. Recently, the Tax Cuts and Employment Act eliminated an exemption for lobbying expenses related to the influence of legislation at the state, county or city level.

Lobbying costs at all levels of government are no longer eligible for a deduction. Italy does not allow deductions for bribes paid to foreign officials. Legislation passed in 1994 made profits from illegal sources taxable without affecting the non-deductibility of bribes. Portugal does not allow the deductibility of bribes for foreign officials. On 20 December 1997, with effect from 1 January 1998, Parliament passed a new law prohibiting any deduction for illegal payments such as bribes to foreign officials. As part of the follow-up process to the OECD Council Convention and RECOMMENDATION, the OECD also collects information on the laws of signatories implementing the Recommendation on Tax Deductibility. Over the past year, the OECD has taken important steps to promote the transparency of national legal frameworks for tax deductibility by providing information on current and pending tax rules on its website (www.oecd.org). Since 1998, the OECD has published country-specific descriptions of the treatment of the tax deductibility of bribes in signatory countries, as well as an updated summary of upcoming changes to its laws on the tax deductibility of bribes. The information on the website is based solely on reports provided by the signatories themselves to the OECD Secretariat. Section 162 of the Internal Revenue Code provides for the exclusion of deductions for bribes, bribes or other illegal payments. Bribes are excluded as long as they have been paid to a government official in the United States. When a company pays bribes to a foreign government official, it is technically deductible if it does not violate the Foreign Corrupt Practices Act.

Hungary does not allow the deductibility of bribes for foreign officials, since only expenses covered by tax legislation are deductible and the tax legislation does not contain a specific reference to bribes. Czech tax legislation and tax regulations do not allow deductions of bribes paid to foreign officials. Deductibility is also not possible in cases where the bribe could be treated as a gift. Gifts are only deductible in exceptional cases and under two specific conditions. The donation must be made for one of the following specific purposes: science, education, culture, fire protection or other social, charitable or humanitarian purposes. The donation may not exceed a strictly defined percentage of the tax base. Only if both conditions are met can the gift be considered tax deductible. A bill to criminalize bribes paid to foreign officials and deny the deductibility of so-called «secret commissions» paid to obtain or maintain public contracts or administrative permits was passed by the Senate on 9 July 1998 and by the House of Representatives on 4 February 1999. It was published in the Official Journal on 23 March 1999 and entered into force on 3 April 1999. However, the new law does not prohibit the deductibility of all bribes for foreign officials. Australia`s law prohibiting bribery of foreign officials was recently passed by both houses of the legislature.

Australia has drafted legislation that would deny deductions (with the exception of minor facilitation payments) for bribery payments to foreign officials and would also cover bribes paid to non-governmental companies linked to foreign governments. This law, which would end tax deductibility from 1 July 1999, was soon to be introduced in Parliament. Under section 577A of the Income and Corporation Tax Act 1988, enacted under the UK Finance Act 1993, the UK does not allow deductions for bribes if such bribery constitutes a criminal offence in breach of the Prevention of Corruption Acts. The United Kingdom stated that the prevention of corruption laws apply to bribes paid to foreign officials. If part of the crime is committed in the UK, for example the offer, payment agreement, advertising, acceptance or payment itself, it would be covered by corruption laws and would then not be eligible for tax relief. In addition, UK tax laws also deny relief to all gifts and hospitality, whether or not they are intended for corrupt purposes.