If you’re importing or exporting goods and have come across the Incoterm DDP (Delivered Duty Paid), you’re not alone in wondering what it really means—or whether you should use it.
From small manufacturers sending samples overseas to experienced exporters navigating customs declarations, DDP Incoterms 2020 can be confusing.
In this post, we’re answering the real questions people are asking—whether you’re an importer or exporter, beginner or experienced. Let’s unpack what DDP actually means, when to use it, and what to watch out for.
What does DDP stand for?
DDP stands for Delivered Duty Paid. It’s one of the 11 official Incoterms® 2020 rules set by the International Chamber of Commerce.
Under DDP, the seller takes full responsibility for the shipment—from export customs clearance to delivery at the buyer’s named place, including import clearance and payment of all applicable duties and taxes.
What does DDP Incoterm mean?
Delivered Duty Paid (DDP) means the seller provides a complete ‘door-to-door’ service. The seller:
- Clears the goods for export
- Arranges international shipping
- Clears the goods for import in the destination country
- Pays all duties and taxes
- Delivers to the buyer’s premises
The risk transfers to the buyer when the goods are ready to be unloaded, meaning the buyer is responsible for unloading.
When to use DDP Incoterm?
DDP is ideal when:
- The buyer is inexperienced with imports or doesn’t want to deal with customs
- You’re sending samples or returns and want control of the process
- You want to offer maximum convenience and service to your customer
For example, if you’re returning goods after maintenance or sending promotional items, DDP ensures your customer doesn’t have to handle import procedures or pay extra at the border.
Is DDP shipping expensive?
It can be. With DDP, the seller handles everything—freight, export and import clearance, duties, taxes, and risk. This level of responsibility usually means:
- Higher upfront costs for the seller
- A markup built into the total price to cover these services
However, many buyers value the simplicity and time saved, especially if they don’t want to deal with customs or extra fees on arrival.
What is the disadvantage of using DDP as an Incoterm?
For buyers:
- It can be more expensive
- There’s a risk that a freight forwarder may complete an import declaration in your name without your consent
- If errors are made, you could be held responsible
Tip: Sign up for CDS import data reports from HMRC to check what import and export declarations are being done in your name.
For sellers:
- You may struggle to import into another country if you’re not a registered entity
- You’re carrying the risk of loss or damage until delivery
- You may need marine cargo insurance to protect yourself during transit
Who pays for duties, VAT, and taxes in DDP?
Under DDP Incoterms, the seller pays all import duties and taxes, including VAT if applicable. In practice, buyers may agree to cover the VAT (especially if they can reclaim it), but the seller remains legally responsible.
This is one of the biggest differences between DDP and other Incoterms—everything is included in the seller’s responsibility.
Does DDP include insurance?
Insurance isn’t required under DDP (unlike CIF or CIP), but since the seller bears the risk during transit, it’s strongly advised to have a marine cargo (goods in transit) insurance policy in place.
What’s the difference between DAP and DDP?
Both DAP (Delivered at Place) and DDP (Delivered Duty Paid) involve the seller transporting goods to the buyer’s named location. The key difference lies in import responsibilities:
| DAP | DDP | |
| Import clearance | Buyer | Seller |
| Duties & taxes | Buyer | Seller |
| Transport | Seller | Seller |
| Risk transfers | When goods are ready to unload | When goods are ready to unload |
Choose DAP if the buyer can manage customs and wants control over import costs. Choose DDP if the buyer wants a stress-free delivery experience.
Is DAP or DDP better?
It depends on:
- The buyer’s ability or willingness to handle import formalities
- Whether the seller is able to import into the destination country
- How the parties want to manage costs and liability
Why should DDP be avoided?
DDP doesn’t need to be avoided—but it requires:
- Clear understanding of responsibilities
- Access to local representation or registration in the destination country
- Willingness to manage customs processes and risk
Avoid using DDP if you’re not set up to handle those obligations.
Can you ship DDP internationally?
Yes, but the process varies by country.
Shipping DDP to the EU:
- You need an EU EORI number
- Or find a customs agent who offers indirect representation
- Some specialist firms can help you import under regime 42, where:
- The seller pays duty
- The buyer becomes liable for VAT (which they can usually reclaim)
- The seller pays duty
Shipping DDP to the USA:
- Work with a customs broker
- Set up as importer of record and provide a power of attorney
- The seller pays duties, but sales tax is typically paid by the consumer at point of sale
Shipping DDP to the rest of the world:
- The buyer is named as importer of record
- The seller is still liable for duties and taxes
- Goods are usually held by customs until all charges are paid
Is DDP the same as “door-to-door”?
Yes—but not all door-to-door shipments are DDP.
- With DDP, the seller handles everything, including import formalities
- With DAP, the buyer still handles import customs clearance, duties, and taxes
Both are door-to-door in terms of transport, but DDP goes further in reducing the buyer’s workload.
Final thoughts: Should you use DDP?
DDP Incoterms offer simplicity for buyers and can be a competitive advantage for sellers—but they also carry risk and responsibility.
If you understand the rules and can work with local partners, DDP can make your international trade smoother and more appealing.
If you’re unsure? Get trained.
Learn DDP, DAP and more with our Incoterms® training
Want to master DDP and the rest of the Incoterms® 2020 rules with confidence?
Join our Incoterms training course where we’ll cover:
- All 11 Incoterms® 2020 rules
- When to use each term (and when not to)
- Real-world examples and risk scenarios
- How to reduce costs, errors and delays
