For both direct and indirect exports, the goods must be exported and proof of export obtained within three months of the time of supply (Notice 703, para. 2.13 and para. 11.5).

The time of supply is normally the earlier of the date the goods are sent to the customer/removed by the customer and the date the supplier receives full payment for the goods.

Deposits and progress/interim payments received in advance of the export may also be zero-rated. However, if the goods are not eventually exported or the exporter fails to meet the conditions for zero-rating, VAT will be due on the total value of the supply, including any payments received in advance.

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