Who pays import duties and VAT under DDP?

The seller. DDP means delivered with import clearance done and duties and taxes paid, so they must be in the seller's price.

What is the difference between DDP and DAP?

Under DAP the seller delivers to the named place ready for unloading but the buyer clears import and pays duties and taxes. Under DDP the seller does those too.

Can a foreign company ship DDP?

Only where it can act as importer. Some countries bar foreign entities from import formalities, and others require a VAT registration or local representative — ICC suggests DAP or DPU where that is a problem.

Term

DDP (Delivered Duty Paid)

DDP, or Delivered Duty Paid, is the Incoterms rule that puts the most on the seller: it delivers the goods to the buyer's named place, cleared for import, with duties and taxes such as import VAT paid. Risk passes at the destination. It suits sellers able to act as importer in the buyer's country — many cannot.

Also called Delivered Duty Paid, DDP Incoterm, DDP shippingUpdated 12 October 2026

What the seller takes on

Under DDP the seller arranges and pays for everything to the named place of destination and is, in ICC's words, ultimately responsible for the import clearance process. The price therefore has to cover the tariffs, taxes, permits and licences the destination's customs require.

Why foreign sellers struggle with it

Some countries prohibit foreign entities from carrying out import customs and tax formalities at all; ICC suggests DAP or DPU there instead.
In Denmark, ICC notes, a non-Danish seller must register for VAT itself or appoint a local VAT representative.
In the UK, the same review finds it difficult for a non-UK seller to sell on DDP.
HMRC notes that UK suppliers designated as importer into the EU may have to register for VAT in the member state.

Worked example: the tax the seller cannot get back

Suppose a seller ships goods invoiced at EUR 20,000 with EUR 1,200 of freight, under DDP, into a country with 4% duty and 20% import VAT, both charged on the value at import.

Duty = 4% × 21,200 = EUR 848 · Import VAT = 20% × (21,200 + 848) = EUR 4,409.60 · Paid at import = EUR 5,257.60

A VAT-registered buyer importing under DAP can usually recover the import VAT. A seller paying it under DDP, without a local VAT registration, usually cannot — it becomes a cost.

The mistake people make

Agreeing to DDP to win the order, then finding the seller cannot legally be the importer, or must register for VAT abroad. Check who can clear the goods before quoting; where the seller cannot, DAP plus the buyer's own clearance does the same job.

FAQ