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Key takeaways
- DDP is an Incoterms 2020 rule where the seller delivers goods cleared for import at the named place and bears the duties and import taxes.
- It places the most obligation on the seller and the least on the buyer.
- The seller must be able to clear the goods into the buyer's country, which often means local registration.
- If the seller cannot handle import clearance, DAP is usually the safer rule.
Free PDF and Excel: DDP cost and responsibility checklist. Get it below
What DDP means
Delivered Duty Paid is an Incoterms rule under which the seller delivers the goods to the buyer at a named place in the destination country, cleared for import, with the seller paying freight, import duties and taxes.
The rules are published by the International Chamber of Commerce. DDP works for any mode of transport. The seller carries the risk from the start of the journey until the goods are ready for unloading at the destination place. The buyer's duty is to take delivery.
A Taiwanese electronics firm sells 500 devices to a retailer in Germany on DDP Hamburg warehouse terms. The firm pays sea freight, German import duty and import VAT through a customs agent and delivers to the retailer's warehouse.
The retailer pays the agreed price and nothing else. But the firm had to register with the German tax authorities to handle the import VAT, which it had not planned for, and the first shipment waited three weeks.
Who does what under DDP
| Task | Seller | Buyer |
|---|---|---|
| Export clearance | Yes | No |
| Main carriage | Yes | No |
| Import clearance | Yes | No |
| Import duties and taxes | Yes | No |
| Delivery to named place | Yes | No |
| Unloading at destination | Not unless agreed | Yes |
| Risk during transit | Yes, until ready for unloading | After delivery |
Free PDF and Excel
DDP cost and responsibility checklist
A checklist to test whether DDP is safe for you, plus a worksheet to price duties and taxes into a quote.
- Responsibility table
- Risk checklist
- Duty and tax pricing worksheet
- Excel landed-cost calculator
Where DDP bites the seller
- Import VAT or GST that the seller cannot recover because it is not registered locally.
- Duty rate surprises from an HS code that the customs officer reclassifies.
- Licences and certificates required for import that only a local entity can obtain.
- Delays in clearance that are the seller's cost.
- Buyers who use DDP to avoid dealing with import compliance and expect the seller to absorb every cost.
Where it suits both sides
- Small parcels, where the carrier offers a prepaid duty service.
- Sellers with a local entity or a customs broker network in the destination.
- Buyers with no import experience and low volumes.
- Samples and e-commerce shipments.
DDP, DAP and EXW
DAP leaves import clearance and duties to the buyer and is the common alternative. Ex Works is the other end of the range: the buyer does nearly everything. For every rule side by side, see our guide to trade terms.
- Seller can legally clear and pay import taxes in the destination.
- Duty and tax rates were checked with a local broker.
- HS codes are agreed.
- Named place is specific, with the full address.
- Price covers duties with a margin for rate changes.
- Who unloads is written down.
- Buyer will not claim import VAT credit twice.
Last checked: 19 October 2026. Reflects the structure of Incoterms 2020 published by the ICC. Tax and customs practice differs by country. Ask a licensed broker.
Frequently asked questions
What does DDP stand for?
Delivered Duty Paid, an Incoterms 2020 rule that places import duties and taxes and delivery to a named place on the seller.
Who pays the import duty under DDP?
The seller. The buyer does not pay import duty or import tax under the rule.
Is DDP better for the buyer?
It is simpler for the buyer, but the price usually includes the seller's costs and risk margin. A buyer with a good broker may pay less under DAP.
Can DDP be used for sea freight?
Yes. DDP works for any mode of transport, including sea, air, road and rail.
What is the difference between DDP and DAP?
Under DAP the buyer clears the goods for import and pays duties. Under DDP the seller does.