Nowadays, other than well-known forms of financial assets like bonds and shares, we also encounter cryptocurrencies. Due to their form and use, most people would categorise them as financial asset. In the last few years, there is a significant rise in cryptocurrency trade, in particular, bitcoin. Cryptocurrencies are still a under- researched and undefined topic, especially in the Republic of Croatia. Considering the fact that the term of cryptocurrencies includes lots of their forms and there are different aspirations of their use (other than investment, there is an idea of cryptocurrencies replacing real money), the tax treatment of the respective cryptocurrencies is complex and still under-researched. With respect to the Croatian Tax Authorities' official opinion, cryptocurrencies' income should be subject to capital income tax. Of course, for the entities subject to corporate income tax, cryptocurrencies' income will be subject to the corporate income tax as part of total revenue. Other than cryptocurrencies income, dividends, interest income and share in profits is also subject to capital income tax. First part of this master thesis deals with capital income tax in order to create a base for better understanding of cryptocurrencies' income taxation. With respect to better understanding of cryptocurrencies' income taxation, one chapter of this thesis covers the theme of processing cryptocurrencies from the accounting perspective (i.e. posting of cryptocurrencies). Due to the fact that European Union member states and some other third countries have a more developed financial market and economy in general (bigger income, developed capital market etc.), there is also increased cryptocurrencies trade in comparison to the Republic of Croatia. With respect to that, legislation and taxation system is more detailed and developed. Considering all mentioned above, after analysis of cryptocurrencies' income taxation, a comparison of taxation in the Republic of Croatia and selected European Union member states and some other third countries will be made in this thesis.