A value in user defined code table 00/EX that controls how a tax is assessed and distributed to the general ledger revenue and expense accounts. You assign this code to customers or suppliers to set up a default code for their transactions.
Do not confuse this code with the taxable, non-taxable code. A single invoice or voucher can have both taxable and non-taxable items. The entire invoice or voucher, however, must have one tax explanation code.