DDP (Delivered Duty Paid)

DDP (Delivered Duty Paid) is an Incoterms rule under which the seller bears all costs and risks of delivering goods to the buyer's named destination — including export and import customs clearance, import duties, and taxes. It places the maximum obligation on the seller of any Incoterms rule: the buyer simply receives the goods with nothing left to pay.

Incoterms are the standardized trade terms published by the International Chamber of Commerce (ICC), first issued in 1936; the current edition, Incoterms 2020, took effect on January 1, 2020.

How does DDP work?

Under DDP, responsibility only transfers to the buyer at the final destination, once the goods are cleared for import and ready for unloading. In practice the split looks like this:

Responsibility	Seller (under DDP)	Buyer (under DDP)
Freight & insurance	Pays and arranges the full journey	Nothing
Export clearance	Handles and pays	Nothing
Import clearance, duties & taxes	Handles and pays — the defining feature of DDP	Nothing
Risk of loss or damage	Carries it until goods reach the named destination	Takes over at delivery
Unloading at destination	Not included	Handles unloading

Because the seller clears import customs, DDP effectively requires the seller (or a partner) to act as the importer of record in the destination country — with the registrations that role demands, such as an EORI number for imports into the EU or UK, and often a local VAT registration.

DDP vs. DAP vs. DDU: what's the difference?

Term	Who pays import duties & taxes	In practice
DDP	Seller	Buyer receives the goods with nothing to pay; seller handles import clearance
DAP	Buyer	Seller delivers to the destination, but the buyer clears import and pays duties and taxes on arrival
DDU	Buyer	Older term ("Delivered Duty Unpaid") replaced by DAP in Incoterms 2010, but still widely used informally in e-commerce to mean the customer pays at the door

Why does DDP matter for cross-border e-commerce?

For a consumer, the difference between DDP and anything else is brutal in its simplicity: under DDP the parcel just arrives; under DDU/DAP-style shipping, the courier demands duties, import VAT, and a handling fee before releasing it. Surprise charges at the door are one of the most reliable ways to trigger delivery refusals, chargebacks, and one-star reviews — which is why a DDP-like, all-costs-included experience has become the de facto standard for serious cross-border D2C and marketplace selling.

DDP also interacts with fulfillment strategy. Bulk-shipping inventory DDP into a market and fulfilling locally — for example into European warehouses or Amazon FBA — usually beats shipping each order cross-border individually, on both cost and delivery speed. And parcel-level DDP into the US has become far more consequential since the US removed its de minimis exemption for low-value imports; our guide on shipping to the U.S. covers what that changes for European brands.

What do brands get wrong with DDP?

• Quoting DDP without the import VAT plan. The seller pays import VAT under DDP, but usually cannot reclaim it without a VAT registration in the destination country. Many contracts therefore use a "DDP, VAT unpaid" variation — agree this explicitly, in writing, before shipping.
• Ignoring the importer-of-record requirement. A foreign seller often cannot legally self-clear imports without a local entity or an importer of record arrangement; shipments booked DDP without one get stuck at the border.
• Under-costing the landed cost. Duties, brokerage, and destination-country VAT all land on the seller's P&L under DDP. Price from the full landed cost, not the factory price plus freight.
• Confusing the carrier's "DDP service" with the Incoterms rule. Couriers billing duties back to the shipper is an operational service; the Incoterms rule is a contractual allocation of risk and obligations. They usually align, but disputes get decided on the contract term, not the courier invoice.

FAQ

Who pays customs duties and taxes under DDP?
The seller pays everything — freight, export clearance, import clearance, duties, and taxes — up to the named destination. The buyer's only responsibility is unloading the goods on arrival.

Is DDP the same as DDU?
No — they are opposites on the key point. Under DDP the seller pays import duties and taxes; under DDU (now formally DAP) the buyer pays them on arrival. DDU was retired from the official Incoterms in 2010 but survives as informal e-commerce shorthand.

Do I need a VAT registration to ship DDP into Europe?
Very often, yes. The seller pays import VAT under DDP and generally needs a destination-country VAT registration (and an EORI number) to clear imports and reclaim that VAT. Without one, either the VAT becomes a sunk cost or the shipment cannot be cleared under DDP at all.

Shipping DDP into Europe or the US means acting as the importer, holding the registrations, and carrying the tax cost. eBrands does all of it for you as your Merchant of Record and importer of record — see how it works for physical-goods brands.