When shipping internationally in 2025, the most critical question remains: who pays the import duties and taxes?

This is the dividing line between DDP and DDU, and getting it wrong is more dangerous this year than ever before. With the US effectively ending the $800 de minimis exemption in August 2025 and the EU enforcing stricter ICS2 data rules, the "old ways" of shipping are causing massive delivery failures.

What Is DDU (Now Technically "DAP")?

DDU stands for Delivered Duty Unpaid.
Note: While still widely used in the industry, "DDU" was officially retired by the ICC in 2010. The correct modern Incoterm for 2025 is DAP (Delivered at Place), though most carriers and customers still use the terms interchangeably.

Under DDU / DAP:

• The seller pays for shipping to the destination country
• The buyer pays import duties and taxes
• The buyer pays customs clearance fees
• The buyer handles brokerage and final handling charges

What DDU Means for Your Customer in 2025

The customer is contacted by the carrier (FedEx, DHL, UPS, or local post) before delivery and told they owe money.

The 2025 Reality Check

Previously, DDU was safe for "low value" shipments. This is no longer true.

• In the USA: As of August 29, 2025, the $800 de minimis exemption (which allowed duty-free entry) has been suspended for most shipments. US customers who are used to paying $0 in fees are now being hit with duty bills on almost every order
• In the EU: Strict "ICS2 Release 3" safety protocols (fully enforced as of Sept 2025) mean that if customer data isn't perfect under DDU, parcels are rejected instantly at the border

If the customer refuses to pay:

1. The shipment is delayed, returned, or abandoned
2. You (the seller) are often billed for the return shipping and the original duties
3. You receive a negative review and a chargeback

What Is DDP?

DDP means Delivered Duty Paid.

Under DDP, the seller takes full responsibility. You pay everything required to get the parcel to the customer's doorstep, including:

• Import duties
• VAT, GST, or Sales Tax
• Customs clearance charges
• Carrier advancement/brokerage fees

The customer pays zero upon delivery. The price they see at checkout is the final price.

What DDP Means for Your Customer

• No surprise charges (Crucial in 2025 economy)
• Faster customs clearance (Data is submitted digitally in advance)
• Higher trust in international brands

This is why DDP has become the standard for 90% of successful cross-border e-commerce brands in 2025.

DDP vs. DDU (DAP): Quick Comparison 2025

Which Should You Choose?

The rules have changed. Use this updated 2025 decision framework:

Choose DDP if:

• You ship to the USA: With the removal of the $800 duty-free threshold, US buyers now face duties on almost all imports. DDP is the only way to prevent mass refusals
• You ship to the EU/UK: VAT is required on all goods regardless of value. Collecting it at checkout (via IOSS or UK VAT schemes) is essential for transit speed
• You care about retention: 78% of customers will not repeat purchase if they are hit with surprise fees
• You want to avoid "Return to Sender" fees: These fees have risen significantly in 2025 and often exceed the value of the product

Choose DDU (DAP) if:

• You are shipping B2B: Business buyers usually have their own customs brokers and tax accounts to reclaim VAT
• You cannot calculate costs: If you lack the tech to calculate duties at checkout (though this is risky)
• You sell extremely high-value items (e.g., $2,500+): Where the buyer expects to handle complex importation personally

How to Calculate Duties and Taxes in 2025

The biggest challenge is that "duty-free" thresholds are disappearing. Rates depend on:

• HS Code (Must be 6-digits or more for 2025 compliance)
• Product Value
• Country of Origin (Manufacturing location matters more than shipping location)

Don't Guess

To make the correct choice, you must calculate the Landed Cost (Product + Shipping + Duty + Tax) before the customer pays.

• Instant Duty and VAT estimates based on current 2025 schedules
• Updated de minimis changes (like the US Aug 2025 update)
• Estimated landed costs