Today, all countries in the world, including Croatia, face some form of tax fraud, regardless of activity. In recent years, monitoring and combating tax fraud has become increasingly demanding, which is why new ways are being sought to make fraud prevention easier. In order to combat tax fraud, each state has its own strategy for combating tax fraud. In order to prevent tax fraud, the tax administration is continuously implementing measures to detect companies involved in tax fraud, with the aim of introducing systems that provide the possibility of early detection of tax fraud. Since it is difficult to track all modes of fraud they are detected when the budget is already damaged. In this paper, we have explained the concept of tax fraud, the form and institutions responsible for combating it. We analyzed their achievements so far, but also pointed out difficulties and irregularities. The tax system of the Republic of Croatia requires more taxpayers' taxes than many other tax systems in the world. Therefore, various forms of tax fraud often occur, so it is necessary to understand their causes