Delivered Duty Paid (DDP) is an Incoterms® 2020 rule that puts the broadest delivery and import-clearance obligations on the seller. The seller arranges and pays for delivery to the precisely named destination, clears the goods for import, and pays applicable import duties and taxes; the buyer receives the goods there, ready for unloading.
DDP does not determine when ownership transfers or when the buyer pays. Those matters belong in the sale contract and are subject to applicable law. Nor does DDP guarantee that a seller can legally complete import clearance in every destination country.
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What does DDP mean in shipping?
Under DDP, delivery takes place when the import-cleared goods are placed at the buyer’s disposal on the arriving means of transport, ready for unloading, at the named destination or agreed point. The seller bears the costs and risks of bringing the goods there. The rule can be used for any mode of transport, including multimodal transport.
The International Chamber of Commerce (ICC) describes DDP as the Incoterms® rule that imposes the maximum level of obligation on the seller among the eleven rules. That obligation includes arranging carriage and completing applicable export, transit, and import formalities, as well as paying applicable import duties and taxes.
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Who is responsible for what under DDP?
| Task or responsibility | Seller under DDP | Buyer under DDP |
|---|---|---|
| Transport and risk to the named delivery point | Arranges carriage and bears the costs and risks of bringing the goods to the delivery point. | Takes delivery at that point. |
| Export, transit, and import formalities | Handles applicable formalities, including import clearance, and pays applicable import duties and taxes. | May need to provide or assist with information or documents if requested for clearance. |
| Unloading | DDP does not itself require the seller to unload. | Ordinarily bears unloading costs, unless those costs are for the seller’s account under the carriage contract. |
| Insurance | DDP does not require the seller to insure the goods. | May arrange insurance if desired; the parties can make separate arrangements. |
The precise delivery point matters: the seller’s costs and risks continue to that point, and risk transfers there when the delivery conditions are met. Naming only a country or city may leave room for disagreement about where delivery actually occurs.
Who pays import duties under DDP?
The seller is responsible under DDP for applicable import duties and taxes, along with the import-clearance task and the costs of bringing the goods to the named destination. The parties should confirm in their contract how the DDP price is calculated and address any route-specific costs or contingencies.
The rule allocates contractual tasks between seller and buyer; it does not override local customs or tax law. The seller should verify before agreeing to DDP that it can complete import clearance and meet the relevant requirements for the goods and destination. Local rules may affect who can act in an import role and what registrations, licenses, or documents are needed.
When does risk transfer under DDP?
Risk transfers when the goods are placed at the buyer’s disposal, cleared for import, on the arriving means of transport and ready for unloading at the named destination or agreed point. The seller bears the risk of getting the goods to that point.
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Risk transfer is not the same as transfer of ownership or the timing of payment. DDP does not settle those matters; the sale contract and applicable law do.
DDP vs. DAP and DPU
| Rule | Import clearance and duties/taxes | Unloading |
|---|---|---|
| DDP | Seller handles import clearance and pays applicable import duties and taxes. | Seller delivers ready for unloading; unloading is not required of the seller by DDP. |
| DAP | Buyer handles import clearance and pays applicable import duties and taxes. | Seller delivers to the named destination, ready for unloading. |
| DPU | Buyer handles import clearance and pays applicable import duties and taxes. | Seller delivers and unloads at the named destination. |
ICC guidance cautions sellers against choosing DDP if they cannot obtain import clearance. DAP may be the relevant alternative when the parties want the seller to carry the goods to destination but the buyer to bear import-clearance costs and responsibility. If seller unloading is required, consider DPU rather than assuming DDP includes it.
What should the parties check before using DDP?
- Name the delivery point precisely. Identify the particular place where delivery will occur, since the point determines how far the seller’s delivery costs and risks extend.
- Confirm that the seller can complete import clearance. Check applicable customs, tax, registration, licensing, and product requirements for the destination and goods. Requirements vary by jurisdiction; DDP does not itself establish that a foreign seller is eligible to import.
- Agree how unloading and related costs are handled. DDP does not require the seller to unload. Check the carriage contract and state any separate allocation clearly.
- Address the rest of the sale contract. Specify payment and ownership terms separately, and clarify any practical arrangements for information or documents the buyer may need to provide to support clearance.
For route-specific decisions, verify local requirements and the contract with qualified customs or trade advisers. ICC’s Incoterms® guidance and official Incoterms® 2020 materials provide further background on the rules and their use.
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What does DDP mean in shipping?
DDP means the seller is responsible for arranging delivery to the named destination, completing import clearance, and paying applicable import duties and taxes. Delivery occurs with the goods import-cleared and ready for unloading.
Who pays import duties under DDP?
The seller pays applicable import duties and taxes under DDP. The seller should first verify that it can lawfully complete import clearance for the shipment in the destination jurisdiction.
Who is responsible for customs clearance under DDP?
The seller handles applicable import-clearance formalities under DDP. The buyer may need to provide or assist with information or documents requested for clearance. Local law determines which parties may perform particular customs roles.
Does DDP include unloading or insurance?
Neither is required of the seller by DDP. Goods are delivered ready for unloading, and the buyer ordinarily bears unloading costs unless the carriage contract puts them on the seller. DDP does not require the seller to insure the goods.
What is the difference between DDP and DAP?
Under DDP, the seller handles import clearance and pays applicable import duties and taxes. Under DAP, the buyer handles import clearance and those charges, while the seller delivers to the named destination ready for unloading.
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