Silk Bridge Journal

Definition

DDP (Delivered Duty Paid) is an Incoterms® rule under which the seller assumes a very broad range of responsibilities associated with delivering the goods to the agreed destination.

The seller arranges and pays for transportation, completes export and import formalities, and bears the costs of import duties and taxes in accordance with the DDP rule. The goods are delivered to the agreed destination, ready for the buyer to receive them.

DDP places the broadest range of obligations on the seller among the Incoterms® rules applicable to different modes of transport.

Why Should Importers Know This?

DDP can be attractive to businesses that want to minimize the number of responsibilities associated with organizing an import. It can be particularly convenient for companies that do not yet have experience arranging international transportation and customs clearance independently.

Convenience does not always mean the lowest cost, however. The DDP price may include many elements that an importer could arrange independently under other models. Before accepting a quotation, it is therefore worth comparing it with alternatives such as FOB and calculating the total cost of the import.

Particular attention should also be paid to who is formally acting as the importer and who is responsible for customs and tax obligations under the applicable regulations.

Related Terms

Incoterms® · FOB · CIF · Landed Cost · Customs Clearance · Importer of Record · VAT · Duty

In Practice

DDP can simplify the import process, but before choosing this rule, it is important to check exactly what the service includes, how duties and taxes are handled, and who is responsible for import formalities.

DDP may look like a “hassle-free” solution, but convenience can come at a price. Always compare the total cost of DDP with alternative import models.