DDP Meaning: Delivered Duty Paid and Who Pays What

DDP stands for Delivered Duty Paid, the Incoterms rule that loads more onto the seller than any other rule in the set. The seller gets the goods to the destination named in the contract, clears them for import in that country, and pays the duty and the import charges that fall due on them.

Delivery happens at a defined moment. The seller places the goods at the buyer's disposal, cleared for import, on the arriving means of transport, ready for unloading, at the agreed point at the named place of destination. Risk passes then. Taking the goods off the vehicle is the buyer's job.

Which costs land on the seller

The seller books and funds the carriage, handles export formalities where they apply, and then does the part that sets this rule apart from the others: it works the import side as well. Clearance in the destination country, the duty on the goods and any other charge levied on import all sit with the seller.

Import value added tax sits with the seller by default under this rule, as one of the charges levied on import, unless the contract expressly says otherwise. Because it is a separate charge from customs duty, and often the larger of the two, put it in writing rather than leaving it to be argued after the invoice.

Packaging works the same conditional way here as it does across the delivered terms. The seller packs at its own cost, except where goods of that kind normally travel loose in the trade concerned.

Naming the destination point

The place written next to the term carries more weight under DDP than under any other delivered rule. It ends the seller's transport obligation, and it is also the point by which the goods have to be cleared for import, because delivery here means putting them at the buyer's disposal already cleared.

Up to that point the seller stands behind two exposures at once: the load on the road, and the customs entry that lets it arrive cleared. Past it, the load is the buyer's, starting with getting it off the vehicle. A city name settles neither line, so write the point out in full.

How DDP differs from DAP, DDU and DPU

The delivered terms separate cleanly on two questions: who clears the goods for import, and who lifts them off the vehicle.

Under DAP (Delivered at Place) the seller runs the carriage, but the buyer clears the goods for import and pays the duty and import taxes. DDP is that shape with the import side moved across to the seller, and the delivery moment is described the same way in both.

DDU (Delivered Duty Unpaid) has dropped out of the current set, and the rule that took its place is DAP, not DDP. A contract still written on DDU should be modernised to DAP.

DAT was renamed DPU (Delivered at Place Unloaded). There the seller takes the goods off the vehicle, while import duty stays with the buyer. DDP is the mirror image of that bargain: the seller pays the duty and the buyer unloads.

When DDP is worth signing, and when it is not

DDP exists because the buyer wants one landed figure and no customs surprises of its own, which is why sellers keep agreeing to a term that hands them the whole import side.

The seller still has to be able to perform it. Import formalities in the country of destination are not open to every party everywhere, and a seller that cannot act as the importer there should say so before signing.

The charge follows the classification: the commodity code declared for the product, with its origin and its customs value, is what the duty is calculated from. A seller quoting DDP is quoting something it has to look up, not round off from the last shipment.

What DDP changes on your transport order

The party acting as importer at the far end is the seller side, or the freight forwarder working for it, not the receiver taking the goods in. That is the reverse of what a DAP or DPU job tells you, so it belongs on the transport order rather than being found out at the gate.

The customs entry is arranged by the seller side, usually through a broker established in the destination country. Ask who that broker is and whether clearance is arranged before the vehicle is dispatched, because a truck waiting on paperwork ordered from another country is still your truck, standing still.

One more line is worth having on the order: who pays for standing time if the entry is not finished when the vehicle reaches the destination. Clearance is the seller's job under this rule, but the hours are spent by your truck at the buyer's gate.