DDP shipping (Delivered Duty Paid) means the seller pays every cost of getting goods to the buyer’s door, including import duties, taxes and customs clearance, so the buyer pays nothing on delivery. It is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce, and it puts the most responsibility on the seller of any rule.
For online sellers, DDP is the difference between a package that arrives with nothing to pay and one that stops at customs until the customer pays an unexpected bill. That gap has grown since the U.S. ended duty-free de minimis treatment for imports on August 29, 2025, and the EU began charging customs duty on low-value parcels on July 1, 2026.
What Does DDP Shipping Mean?
Under DDP, the seller delivers the goods to the named place of destination, cleared for import and ready for unloading. Until that point the seller carries the cost and the risk: export clearance, international transport, import clearance, and any duties, VAT, GST or other taxes the destination country charges. The buyer’s only job is to unload the goods at the named place.
The named place matters. “DDP Toronto, buyer’s warehouse” is a complete term; “DDP” on its own leaves room for a dispute about where the seller’s duty ends. In parcel shipping the named place is usually the customer’s address, so DDP and “duties and taxes paid by the shipper” mean the same thing in practice.
- Seller ships: the seller books the carrier, prepares the commercial invoice and pays transport.
- Export: the seller (or its carrier) clears the goods for export from the origin country.
- Import clearance: the carrier or a customs broker clears the goods into the destination country and the duties and taxes are billed to the seller, not the recipient.
- Delivery: the package is delivered without any charge to the buyer.
DDP vs DAP vs DDU: Who Pays Duties?
The main alternative to DDP is DAP (Delivered at Place), where the seller pays transport to the destination but the buyer handles import clearance and pays duties and taxes. DAP is the default for most international parcels: if you ship abroad without choosing otherwise, the recipient gets the customs bill.
DDU (Delivered Duty Unpaid) is the older name for that arrangement. It was dropped from the Incoterms rules in 2010 and replaced by DAP, but carriers and marketplaces still use “DDU” informally, so you will see both terms on shipping screens. For a related set of terms used in domestic and ocean contracts, see our guide to what FOB means for ownership and freight costs.
| Term | Seller pays | Buyer pays | Risk passes to buyer |
|---|---|---|---|
| DDP (Delivered Duty Paid) | Transport, export and import clearance, duties and taxes | Unloading only | At the named destination, ready for unloading |
| DAP (Delivered at Place) | Transport and export clearance | Import clearance, duties and taxes | At the named destination, ready for unloading |
| DDU (informal, pre-2010 term) | Transport | Duties and taxes | Treated like DAP |
| EXW (Ex Works) | Making goods available at its premises | Everything else, including export clearance | At the seller’s premises |
Why Does DDP Matter More Now?
Low-value parcels used to cross many borders duty-free, so the choice between DDP and DAP rarely mattered for small orders. Several of those exemptions have now ended or narrowed.
- United States: U.S. Customs and Border Protection suspended duty-free de minimis treatment for imports from all countries valued at or below the old $800 threshold, effective August 29, 2025. Imported parcels are now subject to all applicable duties, taxes and fees, and qualified parties other than the carrier may file and pay duties on postal shipments.
- European Union: the customs duty exemption for consignments valued at €150 or less ended on July 1, 2026. Sellers registered for the EU’s Import One-Stop Shop (IOSS) can still collect VAT at checkout on orders up to €150, which works like DDP for VAT.
- United Kingdom: for consignments of £135 or less, the seller or online marketplace charges UK VAT at the point of sale instead of the buyer paying on import.
Tariff rules have changed often since 2025, so check the CBP and destination-country customs pages before you set prices. When a package does get held, our guide to shipment release and faster customs clearance explains what customs needs to let it go.
What Are the Pros and Cons of DDP Shipping?
DDP gives the buyer a domestic-style experience, which is why many cross-border sellers use it. It also moves real cost and compliance work onto the seller.
| For the buyer | For the seller |
|---|---|
| No charge or paperwork at delivery | Fewer refused or abandoned packages held at customs |
| The price at checkout is the full landed cost | Clearer pricing can improve checkout conversion |
| Faster release, since duties are already arranged | Must estimate duties and taxes correctly before shipping |
| Fewer surprises with gifts and first-time orders | Bears the cost if a classification or value is wrong |
| May need a VAT or tax registration (or an importer of record) in the destination country |
The biggest DDP risk is under-estimating. If the duty or tax turns out higher than the seller charged, the seller still owes it. Customs duties and import taxes are generally not refunded if the buyer later refuses the package, so a DDP return costs more than a DAP one.
How Do You Ship DDP With UPS or USPS?
With UPS, you choose who pays duties and taxes when you create an international shipment. Selecting the shipper as the payer for duties and taxes makes the shipment DDP: UPS clears it, bills you for the import charges after delivery, and the recipient pays nothing at the door. UPS can also charge a fee for advancing those charges on your behalf, which you should factor in alongside the duties themselves.
USPS international services generally deliver duties unpaid: the destination postal operator collects any duties and taxes from the recipient. If a buyer needs a duties-paid delivery, compare a UPS shipment with the shipper billed for duties and taxes. For FedEx’s version of the same option, see our guide to Delivered Duty Paid with FedEx.
Whatever the carrier, DDP depends on a complete commercial invoice: an accurate description, the HS tariff code, the country of origin and the true value for each item. A detailed packing slip inside the box helps customs match the contents to the invoice.
Speed is a separate choice from the Incoterm. A DDP parcel can move by express air or by an economy service, and terms such as NDA (next day air) shipping describe the service level, not who pays duties.
How Do You Calculate the Landed Cost of a DDP Order?
The landed cost is what the seller pays to get the order to the buyer under DDP. Add up these parts for each destination:
- Transport: the international shipping charge, including any fuel and residential surcharges.
- Customs duty: the tariff rate for the item’s HS code in the destination country, applied to the customs value (some countries value goods including shipping, others without).
- Import taxes: VAT, GST or sales tax, which many countries charge on the value plus shipping plus duty.
- Clearance and carrier fees: brokerage and any fee the carrier charges for paying duties on your behalf.
- Returns allowance: duties you can’t recover when an order comes back.
Destination tariff rates come from each country’s customs authority, and the U.S. Commerce Department’s country commercial guides on trade.gov summarize import rules by market. Start with the transport line: compare live UPS and USPS international rates in the ParcelPath calculator for your package’s weight and destination.
Is DDP Shipping Right for Your Business?
DDP is usually the right choice when you sell to consumers abroad regularly, your products have predictable tariff codes, and a surprise customs bill would cost you the customer. It is less suitable when margins are too thin to absorb duties, when the product’s classification is uncertain, or when the buyer is a business that prefers to import under its own tax registration and reclaim VAT.
Many sellers use both: DDP for consumer orders to their main markets and DAP for business buyers and low-volume destinations. Whichever you pick, state it clearly at checkout so the customer knows whether duties are included. ParcelPath is free to use for USPS and UPS labels, with up to 89% off USPS and up to 85% off UPS, and our glossary of shipping terms and definitions covers the other trade terms you will meet on international orders.
Frequently Asked Questions
Who pays duties and taxes under DDP shipping?
The seller does. Under the Incoterms 2020 DDP rule, the seller pays all transport, export and import clearance costs, and every duty and tax the destination country charges, until the goods are ready for unloading at the named place. The buyer pays nothing on delivery and only handles unloading.
What is the difference between DDP and DDU shipping?
Under DDP the seller pays import duties and taxes; under DDU the buyer pays them on delivery. DDU was removed from the official Incoterms rules in 2010 and replaced by DAP (Delivered at Place), which works the same way, but many carriers and marketplaces still use the DDU label informally.
Does DDP shipping still matter for packages to the U.S.?
Yes, more than before. CBP suspended duty-free de minimis treatment for imports from all countries valued at or below $800 on August 29, 2025, so low-value parcels are now subject to applicable duties, taxes and fees. Foreign sellers using DDP absorb those charges so U.S. buyers aren’t billed at the door.
Are DDP duties refunded if the buyer refuses the package?
Usually not. Once a package has cleared customs and duties and taxes are paid, they are generally not refunded just because the buyer refuses or returns it. Some countries allow a drawback or refund claim for re-exported goods, but it takes paperwork and time, so build returns into your DDP pricing.
Sources
- International Trade Administration: Know your Incoterms
- U.S. Customs and Border Protection: Suspension of duty-free de minimis treatment (fact sheet, August 2025)
- USPS: International customs forms
- European Commission: VAT e-commerce rules and the Import One-Stop Shop (IOSS) (taxation-customs.ec.europa.eu)
- GOV.UK: VAT and overseas goods sold directly to customers in the UK (gov.uk)
Part of our FOB Meaning guide. Related: Carrier Accepted Ddu, Fob Shipper, What Is Fob Origin.
More in this section: cfa in supply chain.
