What is DDP?
DDP, short for Delivered Duty Paid, is one of the eleven Incoterms® 2020 rules published by the International Chamber of Commerce. Under DDP the seller carries all the costs and risks of getting the goods to the place named by the buyer, including export and import customs clearance, duties and import taxes. The buyer only has to unload the goods.
DDP puts the most responsibility on the seller of any Incoterm. It is the opposite of EXW (Ex Works), where the buyer does almost everything.
Core principle: Under DDP the seller acts as importer. If the seller can’t legally import and recover the import VAT in the destination country, DDP becomes expensive or impossible.
Who does what under DDP
| Task | Seller | Buyer |
|---|---|---|
| Export clearance | ✓ | |
| Main transport and insurance (if any) | ✓ | |
| Import clearance | ✓ | |
| Customs duty and import VAT | ✓ | |
| Unloading at the named place | ✓ | |
| Risk passes | When the goods are made available to the buyer at the named place, ready for unloading | |
DDP for imports into the EU
To ship DDP into the EU, the seller must be able to act as importer of record. A non-EU seller therefore needs an EU EORI number, usually an indirect customs representative, and often a VAT registration in the country of import to recover the import VAT. Without that registration, the import VAT becomes a real cost for the seller.
1. When DDP works well
A supplier with its own EU set-up delivers stock to your warehouse, or a brand sells B2B to retailers who expect duty-paid delivery.
Why it matters: The buyer gets a single landed price and no customs work.
2. When it causes problems
A factory outside the EU offers DDP without an EU VAT registration, or quotes DDP but leaves import VAT for the buyer to pay.
Why it matters: Goods can be held at customs, or the buyer can’t reclaim VAT paid in someone else’s name.
DDP in e-commerce
In e-commerce, “DDP shipping” usually means the webshop collects duties and taxes at checkout so the customer pays nothing on delivery. For EU consumers this is done through the IOSS for parcels up to €150, or by the carrier’s duty-paid service for higher values. It follows the same logic as the Incoterm: the seller takes on the import costs so the customer doesn’t face surprise fees.
DDP vs DAP
Both deliver to the same named place. Under DDP the seller clears the goods for import and pays duty and taxes; under DAP the buyer does. Choose DDP when the seller has a working import set-up in the destination country, and DAP when the buyer does.
Example: A Swiss brand agrees DDP Waredock warehouse, Poland, with its Chinese supplier. Before signing, it checks that the supplier’s forwarder will declare the goods in Poland and that the import VAT will be paid under a VAT number from which the input VAT can be recovered. Otherwise the brand would prefer DAP and import the goods itself.
Frequently asked questions
Who pays import VAT under DDP?
The seller. That is why DDP sellers need a VAT registration in the country of import if they want to recover the VAT.
What is the difference between DDP and DAP?
Under DDP the seller clears the goods for import and pays duty and taxes. Under DAP the buyer does. Delivery point and transport costs are the same.
Is DDP a good choice for buying from China?
Only if the supplier or its forwarder has a proper EU import set-up. Many brands prefer FOB or DAP and import the goods themselves to keep control of customs and VAT.
Does the buyer unload under DDP?
Yes. Under DDP the goods are delivered ready for unloading. If the seller should also unload, the Incoterm DPU covers delivery and unloading, but not import clearance.
