DDP: Delivered Duty Paid (Incoterms® 2020)

DDP (Delivered Duty Paid) means the seller delivers the goods to the named destination, cleared for import with duties and taxes paid, ready for unloading. It puts the most work on the seller; the buyer only unloads.

Quick facts

TransportAny mode

Delivery and risk pass to the buyerAt the named destination, ready for unloading

Main freight paid bySeller

InsuranceNot required

Export clearanceSeller

Import clearance and dutiesSeller

Unloading at destinationBuyer

Where risk and costs pass from the seller to the buyer

Risk

Costs

SellerBuyer

Delivery and risk pass to the buyer: At the named destination, ready for unloading. Simplified diagram: the exact point is the named place written after the rule. The costs line shows who pays the main carriage and, under DDP, the import duties and taxes.

How to write it

DDP + the full destination address + Incoterms 2020, for example: DDP Buyer's store, 45 Main Street, Toronto, Canada Incoterms 2020. To exclude import VAT, say so, for example "DDP ..., VAT unpaid".

What the seller does

Clears the goods for export and for import.
Pays import duties and taxes, including VAT or GST unless the contract excludes them.
Contracts and pays transport to the named destination and carries the risk until arrival.
Delivers the goods ready for unloading.

What the buyer does

Unloads the goods at the destination.
Helps the seller, at the seller's cost, with information needed for import clearance.
Takes the risk once the goods are at its disposal, ready for unloading.
Checks that the price really includes all duties and taxes it expected.

When to use it

DDP suits sellers who know the import country well and can act as importer of record there, such as e-commerce sellers using a local agent. For most small exporters, DAP is safer.

Common mistakes

Agreeing to DDP without being able to act as importer of record or register for tax in the buyer's country.
Forgetting import VAT or GST, which can cost more than the duty.
Not checking duty rates and fees before quoting a delivered price.

DDP vs DAP

The difference is import clearance and the duties and taxes that come with it. Under DDP they are the seller's; under DAP they are the buyer's.

Seller and buyer obligations, article by article (A1–A10 / B1–B10)

Incoterms 2020 gives each side ten matching articles. Here they are in plain language; the ICC text and your contract decide.

	Seller (A)	Buyer (B)
A1/B1 General obligations	Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary.	Pay the price as the contract requires. Documents may be paper or electronic if agreed or customary.
A2/B2 Delivery and taking delivery	Deliver by placing the goods, cleared for import, at the buyer's disposal on the arriving means of transport, ready for unloading, at the agreed point at the named place of destination.	Take delivery at the named place; unloading is normally the buyer's job.
A3/B3 Transfer of risks	Bears all risk until the goods are delivered at the named place, ready for unloading.	Bears all risk from delivery. It also bears the resulting risks if it fails to help with import clearance, and the risk from the agreed date if it fails to give notice, once the goods are identified.
A4/B4 Carriage	Contract or arrange, at its own cost, the carriage to the named place of destination; it may also use its own transport.	No obligation to the seller.
A5/B5 Insurance	No obligation to the buyer to insure. The seller bears the risk until delivery, so it usually insures the transport for itself.	No obligation to the seller. On request, give the seller the information it needs to buy insurance.
A6/B6 Delivery or transport document	Provide, at its cost, any document the buyer needs to take over the goods.	Accept that document.
A7/B7 Export and import clearance	Carry out and pay for export, transit and import clearance, including import licences, security clearances, pre-shipment inspections, and import duties and taxes such as VAT; in practice the seller must be able to act as importer, or use someone who can.	Help the seller, at its request, risk and cost, with documents and information for import clearance.
A8/B8 Checking, packaging, marking	Pay for the checks (quality, measuring, weighing, counting) needed to deliver, and pack and mark the goods for the transport, unless the trade customarily ships them unpacked or the parties agreed specific packing.	No obligation to the seller.
A9/B9 Allocation of costs	Pay all costs until delivery, the transport, export, transit and import clearance, and all import duties and taxes; unloading only if its carriage contract includes it.	Pay all costs from delivery, unloading at the named place unless the seller's carriage contract includes it, and extra costs if it fails to help with clearance or to give notice.
A10/B10 Notices	Give the buyer any notice it needs to take delivery.	If entitled to decide the time or the point of taking delivery at the named place, give the seller sufficient notice.

A plain-language summary of Incoterms® 2020 for everyday use. The full rules are published by the International Chamber of Commerce (ICC), and your contract wording decides. Incoterms® is a registered trademark of the ICC.

All 11 Incoterms 2020 rules

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Common questions

What is the full form and meaning of DDP?

DDP stands for Delivered Duty Paid, one of the 11 Incoterms® 2020 rules. Transport: Any mode. Delivery and risk pass to the buyer: At the named destination, ready for unloading. Main freight paid by: Seller. Insurance: Not required. Export clearance: Seller. Import clearance and duties: Seller.

Does DDP include import VAT?

Yes, unless the contract excludes it. Under DDP the seller pays import duties and taxes, including VAT or GST. The parties can agree otherwise in writing, for example "DDP, VAT unpaid".

Why do many sellers avoid DDP?

Because the seller has to act as importer in the buyer's country, which may require local registration, and it carries the cost of duties, taxes and any clearance delays.

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