THE CHOICE OF SYSTEM FOR TAXING THE BUSINESS RESULT OF FAMILY FARMS

At the beginning of business activity, owners of family farms in Croatia have the legal possibility to choose a tax system (flat tax, income tax or profit tax, or not to be obliged to any tax system), which is reflected in the specifics of their accounting obligations and the need to prepare and submit various types of financial reports. It was interesting to analyse which factors influence the choice made, so the main aim of the research was to identify these factors in order to be able to influence them when they begin to have a limiting effect in some way. The article presents the results of a survey conducted among 288 owners of family farms in Croatia. The analysis of the data collected on taxpayers revealed that the majority of family farms are subject to the income tax system. Only slightly less than a quarter of the owners whose family farms are subject to profit tax have voluntarily opted for this tax system, while the rest are subject to this system due to a legal obligation. The owners of family farms pointed out that the simplicity of accounting, i.e. a relatively simple system of financial reporting, and the estimated greater possibility of influencing business results, influenced their choice the most. This research is limited to identifying the factors that influence the choice of tax system so that it can serve as a guide for further analyses that define the potential impact of certain factors, thereby reducing their significance.