DDP (Delivered Duty Paid) meaning: what the seller covers
DDP puts almost all cost and risk on the seller, which sounds ideal and needs careful checking.
Definition
DDP (Delivered Duty Paid)DDP, or Delivered Duty Paid, is an Incoterms 2020 rule under which the seller delivers the goods to the buyer at the named destination, cleared for import and ready for unloading. The seller bears the costs and risks of transport, export and import clearance, and payment of import duties and taxes; the buyer is responsible for unloading.
What DDP means when a supplier offers it
A DDP quote is the closest thing to a delivered price: the supplier ships, clears customs at your end and pays duties, and you receive goods at your warehouse. For a small brand without a forwarder or customs broker this is attractive, and many suppliers selling to marketplace sellers offer it by default.
The risk sits in import clearance. Under DDP the seller, or an agent acting for it, acts as importer or files the import formalities. ICC guidance notes that some countries do not allow a foreign entity to handle import customs and tax formalities at all. Where it is possible, a supplier may declare a low value or a convenient tariff code to keep its price down. If the authorities later challenge the declaration, the goods can be held, and as the business selling them you may still be affected.
Import VAT is another question. If the seller pays it, you may not be able to reclaim it, and the seller may need a tax registration in your country. Check who appears as importer of record and how VAT is handled before agreeing to DDP. Brands that sell regulated products should also check who holds compliance documents, because the importer can carry legal duties for the product.
This is general information based on the ICC Incoterms 2020 rules. We compare DDP against FOB or FCA on full landed cost in manufacturing support; see the EU market page for what a brand owner handles there.
Related terms
Incoterms
ICC trade terms that set where delivery happens and how risk and costs split between buyer and seller.
EXW (Ex Works)
The seller makes goods available at its premises; the buyer arranges and pays for the rest.
FOB (Free on Board)
The seller delivers goods on board the vessel at the port of shipment; the buyer handles the rest.
Landed cost
The full cost of a product once it reaches your warehouse, including freight, duties and fees.
EU responsible person
The EU-based operator answerable to authorities for a product’s compliance.
Frequently asked questions
Does DDP include import VAT?
Under DDP the seller pays import duties and taxes, which normally includes import VAT, unless the contract says otherwise. Whether the VAT can be reclaimed, and by whom, depends on who is the importer and on local tax rules.
Who unloads the goods under DDP?
The buyer. The seller delivers the goods ready for unloading at the named place. If you want the seller to unload as well, agree it in the contract. DPU includes unloading, but it leaves import clearance with the buyer.
Have a product idea? Check it before you buy stock.
Send a short brief. We tell you what we think, including when we think you should not do it.