The primary aim of this paper is to analyze tax morale and factors that shape it, while also exploring people's perception regarding tax evasion and tax morale. Tax evasion is an indicator of non-acceptance of the tax burden, and its existence in society leaves numerous negative consequences on macroeconomic policy and society as a whole. It is very important that culture of tax compliance is established within society, however, this is achievable when taxes are considered justified and the system fair. Therefore, understanding factors that shape tax morale can be of great importance for tax policy, in the way that such knowledge can be applied in policy and increase rates of tax compliance. The paper consists of six chapters. At the outset of the paper, the definition of tax evasion along with its various forms and effects is presented. Following that, the paper delves into how behavioral economics contributes to understanding taxpayers' behaviour, and provides a detailed exploration of tax morale. To understand tax morale, it is crucial to identify factors that influence it, and therefore, in the next chapter, an analysis of factors based on tax and behavioral literature is carried out. The contribution of this paper is the research that helps to find out to what extent the analyzed factors shape the tax morale of the respondents, i.e. what are the primary motives driving taxpayers' behavior in Croatia. At the end of the paper, a conclusion was drawn based on the previously conducted research. For the purposes of writing this paper, data was collected from various secondary sources and the following research methods were used: descriptive method, analysis, historical and deductive method and quantitative research method.