Foreign profits and losses are included in the overall taxable income as if they derive from business activities carried out in Estonia.
Foreign losses reduce the profits out of which the taxable distributions can be made. The profits attributable to a permanent establishment located in an EU or EEA Member State or Switzerland are subject to an exemption method in Estonia (see Sec. 6.6.). For profits attributable to a permanent establishment located in any third country, an additional subject-to-tax clause will apply (i.e., profits must have been subject to some taxation abroad to qualify for the exemption method).