This thesis provides an overview of the business, of determining the income and the tax base as well as the obligations and rights from the viewpoint of income tax for taxpayers who determines income for self-employment from craft businesses by means of bookkeeping. Income tax is tax to be paid by any natural person for directly earned revenues. This thesis deals with the income tax on activities carried out personally and under its own name, e.g. craft businesses and similar business forms. A craft business is to be understood as a registered activity in accordance with the Crafts Act. Income tax is specific because of its social features. In theory, it is known as the most social tax because it is not calculated on the subsistence minimum of the taxpayer, which is determined by the amount of the personal allowance of the tax payer and dependents. The thesis aims at showing the process of determining income from independent craft activities. Determining income is the result of recording and recognition of business receipts and expenditures in a calendar year in accordance with the provisions of the Income Tax Act and the Ordinance on Income Tax. This thesis gives the basic provisions on the taxation of income deriving from self-employed craft businesses in the Republic of Croatia and the example of an annual tax return with the DOH form for the year 2016. KEY