Thin-capitalisation rules are rules applied by a number of countries in order to protect their national tax base from erosion by companies that have a relatively high level of debt compared to equity. Indeed, the tax treatment of dividend distributions and interest payments differs significantly and this in return has an effect on the amount of profit a company reports for tax purposes. Country tax rules typically allow a deduction for interest paid or payable in arriving at the tax measure of profit. The higher the level of debt in a company, and thus the amount of interest it pays, the lower its taxable profit will be. For this reason, debt is often a more tax efficient method of finance than equity. In recent years, countries all over the world and even more so the Member States of the European Union and the Organisation for Economic Cooperation and Development (OECD) have been trying to combat the negative effect this difference in taxation has on their economies.However, Member States of the European Union are bound by EU law and its provisions on the non-discrimination of companies coming from other European Member States.The focus of this article is Croatian thin-capitalisation rules and their effect. The main hypothesis is that Croatian rules on thin-capitalisation are contrary to EU law. In order to demonstrate this, the author first explains what the rules on thin-capitalisation are and what kind of thin-capitalisation rules exist. Subsequently, the author analyses the relevant provisions of EU law, as well as the case law of the Court of Justice of the European Union regarding thin-capitalisation rules. This analysis is then applied to the existing Croatian rules and finally a conclusion is made as to their potentially discriminatory effect. Finally, the author examines several ways a potentially incompatible thin-capitalisation rule can be made compatible with EU law.