This master thesis analyses the totality of the tax system of the Republic of Croatia with special emphasis on the legislative framework for corporate tax, and the models of benefits, exemptions and incentives for corporate taxpayers. Although the benefits, exemptions and incentives for corporate tax have impact on the reduction of reported corporate tax in the state budget, they are incorporated in the tax system with the purpose of attracting foreign investments and achieving competitiveness. The objective of the paper is to prove whether these are enough to trigger the attraction of capital or whether we are still an unstable market because of a series of other factors affecting this. Insight into all the stipulated benefits, exemptions and incentives will be presented through practical examples, from the perspective of those affecting the reduction of the taxable amount and those affecting the reduction of tax liability. The use of tax benefits, exemptions and incentives enables the taxpayers to legally influence the tax expenditures, but nevertheless, the legislative framework has set clear distinctions of what is allowed and what is not, as well as for ethical behaviour of management boards when compiling the tax returns. Consequently, in the same way that the taxpayers are obliged to act with the care of a good businessman in their business operations, the same is required from them when submitting the financial reports to the Tax Administration. The paper also presents the role of the Tax Administration and its task of controlled monitoring and the implementation of fiscal discipline and conducting audit whereby established irregularities are sanctioned and tax evasions prevented (especially in relation to tampering with the business results, due to the incorrect use and declaration of benefits, exemptions and incentives in the corporate tax system).