The budget of the Member States of the European Union is made up of revenue and expenditure, and in principle they must be balanced. The principle of equilibrium may work in theory, but in practice it is more difficult to do it, since taxes make up a large proportion of budget revenues, and in most cases justifying these revenues through expenditures is much higher. The goals of tax reform stem from reducing the overall tax burden, boosting the competitiveness of the economy and building a fairer tax system. The Republic of Croatia is subject to changes in corporate tax through tax reforms, with the most significant change being in 1998. That year, budget revenues increased by 38% from HRK 1,785 million to HRK 2,461 million, which is due to an increase in the corporate tax rate from 25% to 35%. Looking at the competitiveness of corporate income tax between EU Member States and the Republic of Croatia, it can be said that Belgium, France and Germany are leading in terms of corporate tax rates and other tax forms. Whereas, Bulgaria, Romania and the Baltic countries have the lowest profit tax rates due to underdeveloped economy and competitiveness. Some Member States have a single corporate income tax rate, while others apply multiple tax rates that depend on economic performance. From a theoretical point of view, the terminology of the tax system, the characteristics of tax, the theory of justification of corporate income tax and the problems of tax systems are elaborated, all of which present Smith's principle of fairness, where each taxpayer should pay tax according to the amount of his receipts. The aim of this paper is to analyze trends in corporate income tax fluctuations in the Republic of Croatia and the EU Member States, and to determine the proportion of revenues collected from corporate income taxation relative to total revenues. The thesis also tries to find out whether the tax rates of the Republic of Croatia are too high and whether they should be reduced.