DDP and DAP compared

ICC notes that DDP is the only one of the rules where the seller pays the tariff. That also means a tariff change between quote and arrival is the seller's loss on a DDP contract, and the buyer's on DAP. Our Incoterms overview covers the other rules.

DDP assumes the seller can make the import declaration. Whether that's possible depends on the country:

• Some countries bar it. ICC records that foreign entities can't carry out import formalities in some countries, and gives Brazil as an example.
• The US lets a foreign company do it, with conditions that tighten in January 2027. Under 19 CFR 141.18, a nonresident corporation needs a resident agent in the state of the port of entry who can accept service of process, and a bond with a resident corporate surety. A CBP interim final rule, due to publish on 6 November 2026 and effective 60 days later, adds that a foreign importer of record must be validated under CTPAT or use a CTPAT-validated licensed broker. That includes many US-registered companies with overseas owners. See US low-value shipments.
• Canada has a non-resident importer route. The seller registers for GST and accounts for the tax, and without a permanent establishment it generally has to post security.
• The EU and UK generally want a declarant established locally, or an indirect representative who takes on joint liability. Check with a broker before you quote.

This is our own illustration. Take a sale to a UK business: goods of £2,000, freight and insurance of £200, and an assumed 6% duty.

Under DAP, the buyer pays the £598.40, reclaims £466.40 as a VAT-registered owner, and carries £132 of real cost. Under DDP, the seller pays it. If the seller isn't registered for UK VAT, HMRC's position is that you can't reclaim it. A buyer who wasn't the importer won't have the import VAT evidence in its name either. The same deal has just cost £466.40 more, and nobody got it back.

Registering for VAT in the destination fixes that, at a compliance cost. Then the seller also needs to charge VAT on the sale to the buyer.

• You sell to consumers, who will refuse delivery or dispute the charge rather than pay a surprise bill at the door.
• You have registered, or your carrier offers a true importer-of-record service in that country.
• You've built duty rate changes into your price or terms.

DAP suits B2B sales to buyers who import regularly, have their own broker, and can recover the tax. For a B2C parcel, read IOSS and EU VAT too, since the EU's import scheme removes most of this for orders of EUR 150 or less.

Name the rule, the place and the version, for instance "DAP 14 Quai de la Marine, Rouen, Incoterms 2020", an invented address. Put it on the commercial invoice. If you're offering DDP with VAT unpaid, say so explicitly and don't leave anyone guessing. And if you're quoting a delivered price, the import duty calculator gives you the numbers to quote from.

This is guidance, not legal advice on your contract.