Who pays import duties and VAT under DDP?

The seller. DDP is the only Incoterm where the seller is responsible for import customs clearance and for paying both import duty and import VAT in the destination country.

What is the difference between DDP and DAP?

The difference is import clearance and duties. Under DDP the seller clears the goods for import and pays duty and VAT; under DAP the buyer does. The delivery point and unloading responsibilities are otherwise the same.

Why is DDP risky for sellers?

Because the seller must handle import formalities and pay taxes in a country where it may not be established. This can require a fiscal or customs representative and local VAT registration, and the seller may be unable to reclaim the import VAT it pays.

Does the seller unload the goods under DDP?

No. Like DAP, the goods are delivered ready for unloading, and the buyer is responsible for unloading. The seller's extra obligation under DDP is import clearance and paying duty and VAT, not unloading.

Glossary

DDP (Delivered Duty Paid)

Delivered Duty Paid · DDP Incoterm

DDP (Delivered Duty Paid) is the Incoterms 2020 rule that places the maximum obligation on the seller. The seller delivers the goods, cleared for import, to the named destination and pays everything: carriage, export and import clearance, import duties and import VAT. The buyer only has to receive and unload the goods.

Last updated: June 2026

Key facts

DDP is the only Incoterm where the seller pays import duties and import VAT at the destination country.
The seller bears all cost and risk until the goods arrive, cleared for import, at the named place.
The buyer's only obligation is to take delivery and unload the goods (the seller does not unload under DDP).
DDP requires the seller to act as importer or arrange import clearance in the buyer's country, which can be complex.

Why DDP is the maximum-obligation term

DDP sits at the opposite end of the spectrum from EXW. Under DDP the seller does almost everything: arranges and pays for the whole carriage, clears the goods for export, carries the risk of loss or damage the entire way, clears the goods through import customs in the buyer's country, and pays all import duties and import VAT. The goods are delivered to the named destination already cleared for import and ready for unloading.

For the buyer this is the simplest possible deal — a single delivered price with no surprise charges, no customs paperwork and no duty or import VAT to settle. That makes DDP very attractive for direct-to-consumer cross-border sales, because the customer receives the parcel with nothing more to pay at the door.

The catch is on the seller's side. To deliver DDP, the seller has to handle import formalities in a country where it may not be established, and pay taxes there. In many jurisdictions this means appointing a fiscal or customs representative, and it can trigger obligations such as local VAT registration. DDP shifts not just cost but real administrative and compliance burden onto the seller.

DDP versus DAP and the import VAT question

The single line that separates DDP from DAP is who pays import duty and import VAT. Under DAP, the buyer clears the goods and pays those charges; under DDP, the seller does. Everything else about the delivery point and unloading is essentially the same — under both, the seller delivers ready for unloading and the buyer unloads.

Import VAT under DDP deserves special care. Incoterms 2020 makes the seller responsible for import VAT under DDP, but the seller often cannot reclaim that VAT unless it is registered for VAT in the destination country. Many contracts therefore use a 'DDP excluding VAT' or 'DAP' arrangement instead, so the importing buyer can recover the VAT. Sellers should model the VAT recovery position before agreeing DDP.

Example

A French electronics seller ships an order to a customer in the UK on 'DDP London (Incoterms 2020)'. The French seller pays the courier, handles UK import clearance, and pays the UK import duty and import VAT. The parcel arrives at the customer's door with nothing further to pay. Had the seller used DAP instead, the UK customer would have been billed by the carrier for duty and VAT before delivery.

Why it matters for marketplace sellers

DDP gives customers a frictionless 'all-in' delivered price with no surprise customs charges — ideal for reducing refused parcels and improving the cross-border buying experience.
But DDP makes you responsible for import clearance and for paying duty and import VAT in the destination country, which may force you to register for VAT or appoint a fiscal representative there.
You often cannot reclaim destination import VAT under DDP unless you are VAT-registered locally; consider 'DDP excluding VAT' or DAP if VAT recovery matters.
Use DDP selectively — it is powerful for conversion on key markets but adds real tax and compliance overhead, so price it into your margins.