diff --git a/erpnext/setup/doctype/company/company.js b/erpnext/setup/doctype/company/company.js
index 36033d9..c041d26 100644
--- a/erpnext/setup/doctype/company/company.js
+++ b/erpnext/setup/doctype/company/company.js
@@ -140,7 +140,7 @@
 			doc: frm.doc,
 			freeze: true,
 			callback: function() {
-				frappe.msgprint(__("Default tax templates for sales and purchase are created."));
+				frappe.msgprint(__("Default tax templates for sales, purchase and items are created."));
 			}
 		})
 	},
diff --git a/erpnext/setup/setup_wizard/operations/taxes_setup.py b/erpnext/setup/setup_wizard/operations/taxes_setup.py
index e66fa76..c3c1593 100644
--- a/erpnext/setup/setup_wizard/operations/taxes_setup.py
+++ b/erpnext/setup/setup_wizard/operations/taxes_setup.py
@@ -29,6 +29,7 @@
 	try:
 		if accounts:
 			make_sales_and_purchase_tax_templates(accounts, template_name)
+			make_item_tax_templates(accounts, template_name)
 	except frappe.NameError:
 		if frappe.message_log: frappe.message_log.pop()
 	except RootNotEditable:
@@ -84,6 +85,27 @@
 	doc = frappe.get_doc(purchase_tax_template)
 	doc.insert(ignore_permissions=True)
 
+def make_item_tax_templates(accounts, template_name=None):
+	if not template_name:
+		template_name = accounts[0].name
+
+	item_tax_template = {
+		"doctype": "Item Tax Template",
+		"title": template_name,
+		"company": accounts[0].company,
+		'taxes': []
+	}
+
+
+	for account in accounts:
+		item_tax_template['taxes'].append({
+			"tax_type": account.name,
+			"tax_rate": account.tax_rate
+		})
+
+	# Items
+	frappe.get_doc(copy.deepcopy(item_tax_template)).insert(ignore_permissions=True)
+
 def get_tax_account_group(company):
 	tax_group = frappe.db.get_value("Account",
 		{"account_name": "Duties and Taxes", "is_group": 1, "company": company})