The topic of this undergraduate paper covers accounting and tax treatment of private social welfare institutions for the old and infirm. The theoretical section of the paper presents accounting, financial reporting and the position within the system of income tax, value added tax and profit tax for private social welfare institutions. An example of a financial plan for a private institution is given in the empirical section of the paper. The goal of the paper is to explain theoretically accounting principles, specifics of the chart of accounts and financial plan as well as taxation of private institutions. An essential factor is the private institution’s price for its services. It depends on the level of expenditure for the financial year, hence devising a financial plan is important. Accounting for private institutions is specific in terms of the chart of accounts. Within the double-entry bookkeeping system, business changes are expressed as accounts which in non-profit accounting are allocated in line with the chart of accounts. Private institutions submit financial reports for balance sheets, incomes, expenditures and accompanying notes for the current financial year. Private social welfare institutions are somewhat specific in the taxation system of the Republic of Croatia. They are exempt from paying value added tax given that they perform activities of public interest along subject to special conditions subject on account of which they become taxpayers. Private social welfare institutions are obligors for income tax with special conditions imposed for distributing profit, meaning that profit achieved by a private social welfare institution may not be used for the private purposes of its founders.