DDP (Delivered Duty Paid) is the Incoterms® 2020 rule that places the greatest delivery obligation on the seller. The seller delivers the goods at the named destination, cleared for import and ready for unloading.
Delivery and Risk Transfer
The seller bears the risks and costs of bringing the goods to the named destination, including export formalities, main carriage, import clearance and applicable import duties/taxes. Delivery occurs when the goods are placed at the buyer’s disposal on the arriving means of transport, ready for unloading.
| Activity | Seller | Buyer |
|---|---|---|
| Export clearance | Yes | — |
| Main carriage | Yes | — |
| Import clearance | Yes | — |
| Import duty/taxes | Yes, subject to local law and contract | — |
| Unload at destination | Not required by DDP | Yes |
Why DDP Requires Caution
DDP can be commercially attractive to a buyer, but it can be difficult for a foreign seller if local law does not allow it to act as importer of record, register for taxes or recover import VAT/GST. The seller should confirm customs, tax, licensing and importer-registration requirements before quoting DDP.
Example
DDP Buyer Warehouse, Bahrain: the overseas seller arranges transport, completes import clearance and pays applicable import duty/tax before delivering the shipment to the buyer’s warehouse ready for unloading. If local rules prevent the seller from acting as importer, DAP may be operationally more suitable.
Common Mistakes
- Quoting DDP without confirming importer-of-record capability.
- Assuming every tax is automatically recoverable by the seller.
- Failing to define the named delivery point precisely.
- Confusing DDP with an obligation to unload.
Reference: ICC Incoterms® 2020, DDP explanatory notes.
