A more detailed description of the role of transfer pricing in the tax system of the Republic of Croatia, as well as the importance of having all the necessary documentation for transfer pricing purposes, are emphasized in this thesis. By describing transfer pricing through the compilation of a functional and economic analysis for transactions between affiliated companies, an abbreviated overview of the process of making a study on transfer prices was given. The procedure of making a transfer pricing study is based on transfer pricing provision included in the article 13 of the Corporate Profit Tax Law and article 40 of the Corporate Profit Tax Regulations. In addition, this thesis describes the purpose, intention and problems of transfer prices. Furthermore, a more detailed insight into the transfer pricing procedure is given, but other important documentation is also highlighted, which is prepared for the purpose of justifying transfer prices between affiliated companies.