Fiscal policy of any country, including the Republic of Croatia, must offer quality and be efficient in order for a country to meet its needs. Income taxation systems among the European Union member states are fairly unharmonized. One of the causes lies in a large range of corporate income tax rate, and thus in companies' tax burden. The objective of the European Union is harmonization of such tax forms, thus aiming to achieve tax equality that offers economic entities equal conditions on internal market. In that context, the introduction of common consolidated corporate income tax base is being considered as it would offer harmonized calculation of tax base for a company on internal market. In addition to these tasks and by using fiscal measures, fiscal policy can be significant in encouraging and developing companies' innovative and technological development. Tax incentives for research and development comprise one of the most important instruments of fiscal policy which aims to encourage research and development investment. Given the current situation of global and domestic economy regarding the use of tax incentives for research and development, special attention should be given to the analysis of the current level and the implementation of tax incentives for research and development. In order to prove the use of tax incentives for research and development under corporate income tax and encourage investment in research and development, the empirical research was conducted in large Croatian companies that are corporate income taxpayers. The conducted research undisputedly confirms the hypothesis that the tax policy of the European Union member states, as well as their use of different models for research and development investment should present a possible solution which should be applied by the Republic of Croatia as well for more efficient investment in research and development.