Delivered Duty Paid (DDP) – Incoterms® 2020 in detail

The following article describes everything you need to know about the Incoterm “Delivered Duty Paid” (DDP). In case of any questions or unclarities, do not hesitate to contact us.

Group D: Delivery – Delivered Duty Paid (DDP)

Delivery Duty Paid (DDP) is an Incoterm in which the seller is responsible for transporting the goods until they have reached a destination nominated by both parties.

It is part of the D Group Incoterms® 2020 rules. When any of D Group rules are followed, the delivery place and the destination point are the same location. This means, from a seller's point of view, their obligation to fulfil the goods delivery is only applicable when they arrive at the agreed destination point.

Along the transport line, this means that the risk is transferred from the seller to the buyer very late in the process, essentially at the place of their arrival at the pre-determined destination point.

As part of the seller's responsibility, they are required to bring the goods to the buyer at the point where they agreed in the buyer's country, or at any rate in a country chosen.

In essence, the D Group rules enforce the maximum level of involvement of the seller, referring to risk, costs and obligations.

What is DDP?

DDP Incoterms® 2020 is a rule which can be used for all types of transport, including the combination of transport modes.

As part of the seller's responsibility, they are required to do the following:

Organise the transport mode
Organise delivery of the goods to a specified place in the contract
Organise and complete payment of import customs clearance (in the case of international trade) and taxes such as customs duty, VAT and excise duty where applicable.

The risk of damage to the goods passes to the buyer from the seller, only when the goods arrive at the buyers' location, ready for the point of unloading.

What does a DDP Contract include?

When composing a sales contract for DDP, the contract should cover:

Value of the goods
Delivery cost of goods
Customs Clearance of the goods (including import and export fees and taxes where required)

Risks for the Seller

The seller arranges and bears the cost of:

Delivery of the goods to the final destination
Paying for import duty, taxes and customs clearance

Risks for the Buyer

The buyer arranges and bears the costs to:

unload the shipment at their requested destination point.

How ALS can support you with the complexity of international commerce

ALS is an innovative, neutral, and globally active customs broker. We operate as a unified entity, where every member of our team, from your dedicated contacts to our board of directors, is committed to meeting your specified needs.

We are here to guide you through the process of international trade. Whether it’s speaking to one of our sales team, or requiring further guidance with our consultants, we offer everything to help facilitate your complete end-to-end customs solution. By law, we are not able to provide you with advice on which Incoterm you should use. However, we can provide you with information which you can use to make your decision.