Incoterms DDP: Delivered Duty Paid
Named Place Required: Place of Destination
The seller is responsible for all costs and risk until the goods are unloaded.
Under the Delivered Duty Paid (DDP) Incoterm rules, the seller assumes all responsibilities and costs for delivering the goods to the named place of destination. The seller must pay both export and import formalities, fees, duties and taxes.
The seller is not obligated to insure the goods for pre-carriage or main carriage.
The buyer is free of any risk or cost until the goods are unloaded from the vehicle at the named place of destination, usually the buyer’s place of business.
DDP is the only Incoterms rule that places responsibility for import clearance and payment of taxes and/or import duty on the seller.
These last requirements can be problematic for the seller. In countries with complex or bureaucratic import clearance procedures a seller with local knowledge may prefer to take on these responsibilities.
DDP Incoterm Obligations
- Goods, commercial invoice and documentation
- Export packaging and marking
- Export licenses and customs formalities
- Pre-carriage and delivery
- Loading charges
- Main carriage
- Proof of delivery
- Import formalities and duties
- Cost of all inspections
- Delivery to named place of destination
- Payment for goods as specified in sales contract
- Assist seller in obtaining any documents or information necessary for export or import clearance formalities
DDP functions much like DAP with one most important exception. It is the seller’s obligation
to import clear the goods in the buyer’s country and pay any duties and VAT/GST. This rule
should be used with great care as the seller might need to be a registered entity both
for import and VAT/GST in the buyer’s country, a fairly unlikely scenario. If the seller finds
itself unable to be the importer or to be able to recover any VAT/GST paid then the parties
should instead contract on DAP terms.
Any excerpts quoted from the Incoterms® 2020 rules are the copyright of the International Chamber of
Commerce. Source: ICC website. The full text of the 2020 edition of the Incoterms rules is available at
https://2go. iccwbo.org/. The word “Incoterms” is a registered trademark of the International Chamber of Commerce.