Which is the best way to define the Tax Status & Tax Rate Codes?

We are configuring E-B Tax (VAT) for a demo purpose and needed clarification on below,

Requirement:

1. VAT need to be configured both for Purchasing (Input VAT) & Sales Transactions (Output VAT)

2. Requires 2 separate GL Codes to capture Input VAT & Output VAT Separately

3. Having 3 different rates i.e. 5%, 0%, Exempt

In the above scenario which is the best approach to define the Tax Status & Tax Rate Codes. I am thinking the below approaches, please let us know your inputs.

Option 1: Tax Status: Standard, Zero & Exempted

                Tax Rates: 1) Input 5%, Output 5% (Standard)  2) Input 0%, Output 0% (Zero) 3) Input Exempt, Output Exempt (Exempted)

Option 2: Tax Status: Input VAT, Output VAT