The theme of this graduation thesis is taxation in the hospitality industry. The hospitality is closely related to tourism. The importance of tourism, and therefore hospitality as industries in the Republic of Croatia is the fact that strongly affects the total Croatian economy, accounting for almost 20% of GDP and is a major source of income. The taxes are an indispensable part of the functioning and funding of any country in the world. Since the tax burden is an important aspect of the performance of any activity, so in the hospitality industry tax burden is a very important factor, too. In order to develop and make changes in industries, it is necessary to fully understand their function. Hospitality is seen as the activity of providing accommodation, food and drinks, and is undoubtedly linked to tourism as a social phenomenon. The presence of hospitality facilities, initiated attractive space, range, diversity and quality of content, and the degree of adaptation to the requirements of demand, encourage the development of tourism in a given area. On the other hand, taxes are ubiquitous, both in the business life of economic entities, as well as in the private lives of citizens. It is not difficult to conclude that the taxes are the most significant income of the countries, assessed from the standpoint of their financial activities as they are without any competition the most important state revenue with more than 80% share in the total revenues of the state and provide and ensure its normal functioning. Since the tax burden is an important aspect of the performance of any industry, so is in the hospitality industry a very important factor. In order to develop industry, in this case the hospitality industry, it is necessary to fully understand their functioning, which was the goal of this graduation thesis.