This option allows you to create and maintain account / tax classes. Tax classes are a set of five (5) accounts which are linked to the Ledger tab of the Stock items  (Default ribbon) for a selected stock item. 

When a stock item is linked to a tax class, it will disable the Lookup button on the Ledger tab of Stock items  (Default ribbon) for a selected stock item. It will automatically set the Input and Output Tax, Sales, Cost of sales and Stock control account fields without having to select them for each stock item.    

To set Stock Tax classes:

  1. On the  Setup ribbon, select Setup → Stock information. The Stock information screen will be displayed.
  2. Click on the Tax classes tab.

  1. Enter the Name  (description) for the tax class.
  2. Select the following accounts:
    1. Input Tax - Select the Input Tax account.

If you are not registered for VAT/GST/Sales Tax, you may leave the Input Tax accounts blank. 

You may activate the Use default tax - Stock file override settings on the Creditors (Accounting information tab (Default ribbon)) for a creditor (supplier / vendor) account, and select a different VAT/GST/Sales Tax account or code on the Tax lookup facility for that creditor (supplier / vendor). 

When purchase documents or supplier returns documents for the creditor (supplier / vendor) is updated (posted) to the ledger, the selected Input Tax account for this Stock item will be ignored and the purchase transaction will be updated (posted) to the specified Input Tax account for the creditor (supplier / vendor). 
    1. Output Tax - Select the Output Tax account.

If you are not registered for VAT/GST/Sales Tax, you may leave the Output Tax accounts blank. 

You may activate the Use default tax - Stock file override settings on the Debtors (Accounting information tab (Default ribbon)) for a debtor (customer / client) account, and select a different VAT/GST/Sales Tax account or code on the Tax lookup facility for that debtor (customer / client). 

When invoices or credit notes for the debtor (customer / client) is updated (posted) to the ledger, the selected Input Tax account for this Stock item will be ignored and the purchase transaction will be updated (posted) to the specified Input Tax account for the debtor (customer / client). 
    1. Sales - Select the Sales account.

If you have more than one Sales account, or use Sub-accounts, you may select the applicable Account or Sub-account for each of your Stock items. 
    1. Cost of sales - Select the Cost of sales account.

If you have more than one Cost of sales account, or use Sub-accounts, you may select the applicable Account or Sub-account for each of your Stock items. 
    1. Stock control - Select the Stock control account.                
  1. Click on the OK button to save the Tax class.
  2. Go to the Stock items and select a stock item from the list. 
  3. Click on the Ledger tab of the selected stock item and select the Tax class from the list. 
  4. All the accounts linked to the Tax classes tab - Setup → Stock information will be linked to the applicable account fields on the Ledger tab of the selected stock item.

Once you have created Tax classes, and selected a Tax class from the list on the Ledger tab of stock items, you may change them and click on the Apply to All button. This will update all stock items with the new accounts selected (changed) for the each stock item linked to the Tax class.