Incoterms DDP (Delivered Duty Paid)

Incoterms DDP (Delivered Duty Paid) is an international logistics term used in contracts for the sale of goods, which means that the seller is responsible for delivering the goods to the named place of destination and for paying all costs, including import duties and taxes until the goods are delivered to the buyer.

Table of contents

Features of delivery on DDP terms

Some of the features of delivery on DDP (Delivered Duty Paid) terms are:

Delivery: The seller is responsible for delivering the goods to the buyer’s specified location or address.
Risk transfer: The seller is responsible for the risk of loss or damage to the goods until they are delivered to the buyer.
Customs clearance: The seller is responsible for arranging and paying for all customs formalities and fees required to import the goods into the buyer’s country if required by the laws of the buyer’s country.
Transportation: The seller is responsible for arranging and paying for the transportation of the goods from the point of origin to the buyer’s specified location.
Insurance: The seller is responsible for obtaining insurance coverage for the goods during transit.
Documentation: The seller is responsible for providing all necessary documentation, such as invoices, packing lists, and all the required certificates, to enable the goods to be cleared through customs.

DDP terms are often used in international trade when the buyer is unfamiliar with the customs procedures or regulations of the seller’s country and when the seller is willing to assume the risk and cost of importing the goods into the buyer’s country.

Seller’s requierements

As per Incoterms DDP, the seller is responsible for delivering the goods to the buyer’s specified location and paying for all costs associated with the delivery until the goods are delivered to the buyer.

It is crucial for the seller or seller`s agent to carefully review and understand the terms of the DDP agreement, as it requires them to assume a significant amount of risk and cost. Sellers should ensure that they have the necessary resources and expertise to fulfill the requirements of the DDP agreement and comply with all applicable regulations and laws.

Seller’s obligations

Here are some of the seller’s obligations under DDP terms:

Delivery of Goods: The seller must deliver the goods to the buyer at the named place of destination.
Transport: The seller is responsible for arranging and paying for the transportation of the goods from the point of origin to the buyer’s specified location.
Export Customs Clearance: The seller is responsible for obtaining all necessary export licenses, permits, and documentation for the goods to leave the country of origin.
Import Customs Clearance: The seller is responsible for arranging and paying for all customs formalities and fees required to import the goods into the buyer’s country.
Payment of Duties and Taxes: The seller is responsible for paying any import duties and taxes applicable to the buyer’s country.
Insurance: The seller is responsible for obtaining insurance coverage for the goods during transit.
Documentation: The seller is responsible for providing all necessary documentation, such as invoices, packing lists, and bills of lading, for enabling the goods to be cleared through customs.
Notification: The seller must notify the buyer when the goods are ready for delivery and provide any necessary information for the buyer to take delivery.
Risk transfer: The seller is responsible for the risk of loss or damage to the goods until they are delivered to the buyer.
Payment: The seller is entitled to receive payment from the buyer for the goods and related services per the agreed-upon terms.

In summary, the seller has many obligations to ensure the successful delivery of goods to the buyer’s specified location. The seller must fulfill these obligations carefully to comply with all applicable regulations and laws and avoid any potential issues that may arise during the transaction.

Buyer’s requirements

Under Incoterms DDP, it is crucial for the buyer to carefully review and understand the terms of the DDP agreement to ensure that they fulfill their requirements and obligations. Please fulfill these requirements to avoid delays in delivery or additional costs, which could lead to disputes between the buyer and the seller. Therefore, ensuring effective communication between both parties is essential.

Buyer’s obligations

Here are some of the buyer’s obligations under DDP terms:

Payment: The buyer must pay the seller for the goods and related services per the agreed-upon terms.
Take delivery: The buyer must take delivery of the goods at the named place of destination.
Notification: The buyer must provide the seller with all necessary information to enable them to arrange for the delivery of the goods, including the name and address of the delivery location.
Import clearance: The buyer is responsible for obtaining all necessary import licenses, permits, and documentation to import the goods into their country.
Customs clearance: The buyer is responsible for arranging and paying for all customs formalities and fees required for the goods to be cleared through customs.
Payment of duties and taxes: The buyer is responsible for paying any import duties and taxes applicable to their country.
Inspection: The buyer has the right to inspect the goods before accepting delivery.
Communication: The buyer must maintain effective communication with the seller to ensure that the delivery of the goods is completed as per the agreed-upon terms.

In summary, the buyer has several obligations that they must fulfill to ensure the successful delivery of goods to the named place of destination. The buyer must fulfill these obligations carefully to comply with all applicable regulations and laws and avoid any potential issues that may arise.

If you are not a specialist in international shipping, it is quite challenging to consider all the logistics chain links. This causes delays in the transportation of goods and additional costs.

Our company will organize the transportation of goods on DDP terms at favorable prices and with high service. We help to conclude a contract for transportation, choose a responsible carrier or forwarder, and control transportation costs. Shipping, assistance in customs clearance for export and import, unloading, and additional services – PartnerTrade offers a full range of international logistics services.

FAQ

Is it true that DDP is very expensive?

Costs and risks are carried and paid in any case; the only difference is who pays – the seller or the buyer. The transportation budget remains the same under any delivery conditions. Incoterms define only who pays and is responsible for a particular transportation section.

What documents are required for DDP?

For DDP shipments, you will need a commercial invoice, bill of lading, packing list, insurance certificate, and import/export documentation (permits, licenses, or certificates of origin).

Ensuring that all required documentation is prepared and submitted accurately and on time is essential to avoid delays or shipment issues. The requirements for documentation may vary depending on the destination country, the type of goods being shipped, and other factors, so it is essential to check with the relevant authorities and obtain professional advice where necessary.

What about VAT on DDP shipping?

Under DDP, the seller is responsible for paying all taxes and duties, including value-added tax (VAT), for delivering goods to the buyer’s specified location. Therefore, DDP shipping includes VAT if applicable in the buyer’s country.