DDP vs DAP: Which Incoterm to Use When Selling Abroad or Online

What DAP and DDP make the seller do and pay

DAP (Delivered at Place) and DDP (Delivered Duty Paid) are Incoterms 2020 rules for any mode of transport. Under both, the seller arranges and pays all transport to the named place, clears the goods for export and carries the risk of loss or damage until they arrive there on the arriving vehicle, ready for unloading. Neither rule requires the seller to insure, but because it carries the risk until arrival it usually does.

The difference is import clearance. Under DAP the buyer unloads, clears the goods for import and pays the import duties and taxes, plus any storage or delay costs if it does not clear them in time. Under DDP the seller also clears the goods for import and pays the duties, VAT or other import taxes, while the buyer unloads and gives the seller the information it needs for clearance. DDP is the maximum obligation for a seller and the only one of the 11 rules under which the seller pays import duties and taxes.

DPU (Delivered at Place Unloaded) is the only rule under which the seller unloads: risk passes once the goods are unloaded at the named place, and the buyer clears them for import as under DAP. Use it only if you are sure the goods can be unloaded there. DPU replaced DAT in 2020 and can be any place, not only a terminal.

• DAP: seller pays transport to the named place and bears the risk until arrival; buyer unloads, clears imports and pays duty and taxes.
• DPU: as DAP, but the seller also unloads, and risk passes after unloading.
• DDP: as DAP, but the seller also clears imports and pays duty, import VAT or GST and other import taxes.
• No rule covers title, price, payment terms or governing law; put them in the sales contract.

Who can be importer of record on a DDP sale

The importer of record (IOR) declares the goods to customs, itself or through a customs broker, pays the duties and import taxes and answers for the classification, value and origin declared. It keeps the entry records and receives any refunds. On DAP the IOR is normally the buyer; on DDP it is you or a party you appoint, and each country decides who may take the role.

ICC notes that some countries require the local importer to clear the goods itself, and lists Brazil, where a foreign seller may not arrange import clearance. Its advice to sellers that cannot meet DDP's obligations is to use DAP or DPU (see Triplicate's note on the importer of record).

• United States: the IOR must be the owner or purchaser of the goods, or a licensed customs broker designated by one of them, and duties are its personal debt even if a broker fails to pay them (19 CFR 141.1). A foreign seller can be a non-resident importer with an importer number (IRS EIN, or a CBP-assigned number via CBP Form 5106), a resident agent for service of process and a bond with a resident corporate surety (19 CFR 141.18).
• US customs bond: needed for formal entries, generally shipments over USD 2,500, as a single transaction bond or a continuous bond of at least USD 50,000 (see Triplicate's note on US customs bonds).
• European Union: EU law has no importer of record; the declarant must be established in the EU, with narrow exceptions (Union Customs Code, Article 170). A non-EU seller on DDP normally uses an indirect representative, which declares in its own name with its own EORI and also owes the duty. You need your own EU EORI only if you lodge declarations yourself or act as a carrier.
• United Kingdom: a GB EORI usually requires premises in the UK, and a business not established in the UK imports into Great Britain only through someone acting indirectly for it, who holds the EORI.
• Canada: a foreign company can be a non-resident importer with a Business Number, an import-export (RM) account and its own financial security in the CARM Client Portal, normally using a Canadian customs broker.

Import VAT and GST: who pays it and whether you get it back

Import VAT or GST is the hidden cost of DDP. The importer pays it on top of duty: in the EU at the rate of the country of import, in the UK at 20% on cosmetics, for example, and in Canada as 5% GST on the duty-paid value, with the provincial part on commercial goods in HST provinces generally self-assessed on the importer's return.

Whether it comes back depends on registration. In the EU a VAT-registered business buyer can usually deduct import VAT; a consumer cannot. A UK VAT-registered importer can account for it on its VAT return through postponed VAT accounting; a non-UK business registered for UK VAT does this by instructing its agent in writing and being entered as consignee. In Canada a GST/HST-registered importer recovers it as an input tax credit; an unregistered non-resident importer cannot. Tax you cannot recover is an extra cost that your DDP price must cover.

Owing import VAT usually brings a registration. In the EU, a non-EU seller liable for import VAT is treated as making its onward sale in the country of import (VAT Directive, Articles 32 and 201), so it usually needs a VAT registration there; rules vary. In the UK, a non-established business has no registration threshold and must register once it makes taxable supplies of any value. A DDP clause that excludes VAT is possible, but ICC warns that altering a rule carries risks; DAP is usually cleaner.

Online sellers: low-value parcels to the EU, UK and US

On DAP terms a consumer may be asked for VAT, duty and fees at delivery and refuse the parcel. Low-value relief has also narrowed, so plan who pays before you set checkout prices (see Triplicate's note on EU import rules for sellers):

• EU VAT: the Import One-Stop Shop (IOSS) lets you charge EU VAT at checkout on distance sales in consignments of intrinsic value up to EUR 150 (the goods' price without transport and insurance, unless these are included in it and not shown separately), so the customer pays no VAT at delivery. A non-EU seller usually needs an EU-established intermediary and gives its IOSS number (IM plus 10 digits) to the carrier; it is not an EORI. On a marketplace, the marketplace is the deemed supplier and collects the VAT. Above EUR 150, VAT is paid at import.
• EU duty: from 1 July 2026 to 1 July 2028, distance sales in consignments up to EUR 150 pay a EUR 3 customs duty per item, whatever the VAT method; an item is goods sharing a tariff classification. A separate EUR 2 handling fee per item, on distance sales of any value, is due to start by 1 November 2026; confirm the date.
• United Kingdom: no import VAT is charged on consumer consignments of £135 or less; the seller or online marketplace charges UK VAT at the point of sale. The £135 customs duty relief is to be removed on a date the Treasury sets, by October 2028 at the latest.
• United States: the USD 800 de minimis exemption has been suspended for all countries since 29 August 2025, indefinitely since 24 June 2026, and by law ends on 1 July 2027. Low-value shipments need an entry, informal up to USD 2,500; bona fide gifts up to USD 100 stay exempt.

Customer experience versus risk and paperwork

DDP gives the buyer one delivered price with nothing to pay at import. In exchange you take on the importer's liabilities: you answer for the classification, value and origin declared, owe the duties, bear the risk of tariff increases, and need the registrations, representative, bond and records that come with acting as importer. In the US, for example, the Section 301 duties of 10% or 12.5% on most goods since 24 July 2026 are paid by the importer of record, which on DDP is you.

DAP keeps those liabilities with the buyer but moves the surprise to the buyer's side: a consumer may face charges at the door, and a business buyer that clears slowly runs up storage and demurrage at the destination. Agree in the quote and contract who pays destination terminal handling charges (THC), storage, demurrage and detention.

Some companies offer to act as importer of record, or in Europe as indirect representative, for foreign sellers, making DDP possible without a local company. Check how the provider qualifies, who pays and reclaims import VAT, who keeps the records and receives refunds, and who bears extra duty if customs later changes the entry.

How to price DAP and DDP, and what to write on the invoice

Build both prices from the same base. A DAP price covers the goods, export clearance, freight to the named place and any insurance you buy. A DDP price adds the importer's costs: duty for your tariff code and origin, customs fees such as the US Merchandise Processing Fee on formal entries (0.3464%, from 1 October 2026 at least USD 34.58 and at most USD 670.86) and the Harbor Maintenance Fee on sea cargo (0.125%), import VAT or GST you cannot recover, and broker, representative and bond costs. Duty is charged on the customs value, which includes freight and insurance up to the border in the EU and UK and excludes international freight and insurance in the US. Triplicate's export price calculator helps you build the price for the rule you quote.

On the quote, contract and invoice, write the rule, the exact address and the edition, for example "DAP [buyer's warehouse address] Incoterms 2020"; there is no Incoterms 2025 or 2026. Show freight, insurance, packing and other charges as separate amounts, even on a DDP invoice, so customs can add or deduct them instead of taxing the full delivered price. Name the importer of record if it is not the buyer, add the EORI or importer numbers the destination uses, and agree in writing whose EORI goes in the importer and declarant fields (see Triplicate's note on commercial invoice requirements).