Incoterms® 2020 · Any mode of transport
DDP (Delivered Duty Paid) under Incoterms® 2020
DDP places the maximum obligation on the seller: it brings the goods to the named destination, clears them for import and pays all import duties, VAT and other taxes. The buyer only has to unload the goods from the arriving vehicle.
- Risk transfer
- Risk passes to the buyer when the goods, cleared for import, on the arriving means of transport and ready for unloading, are placed at the buyer's disposal at the named place of destination.
- Cost transfer
- The seller pays all costs to destination, including export and import clearance, import duties and import VAT; the buyer pays unloading unless included in the contract of carriage.
- Mode of transport
- Any mode of transport
- Insurance
- Not required, agreed between the parties
Who does what along the delivery chain
- 1Loading at seller's premisesSeller
- 2Export clearanceSeller
- 3Transport to port/terminal of departureSeller
- 4Loading onto main carriageSeller
- 5Main carriageSeller
- 6Cargo insuranceNot required / negotiable
- 7Unloading at destinationBuyer
- 8Import clearanceSeller
- 9Import duties & taxesSeller
- 10Delivery to final destinationSeller
Seller's obligations
- Provide the goods, a commercial invoice and suitable packaging.
- Carry out and pay for export, transit and import clearance.
- Pay import duties, VAT and any other import taxes and charges.
- Contract for carriage, or use its own transport, to the named destination.
- Bear all risks until the goods are ready for unloading at destination.
- Provide documents enabling the buyer to take delivery and notify delivery.
Buyer's obligations
- Pay the price.
- Unload the goods from the arriving vehicle, unless included in the contract of carriage.
- Assist the seller with information and documents needed for import clearance.
- Provide evidence of having taken delivery.
- Bear risks and costs if it fails to take delivery on time.
Use it when
- The seller has an entity, branch or partner able to act as importer in the buyer's country.
- E-commerce and international courier, where the seller offers a fully landed delivery service.
- The buyer cannot or does not want to handle import formalities.
Avoid it when
- The seller cannot act as importer of record in the buyer's country.
- The buyer needs to recover import VAT, since the taxpayer is the party named as importer.
- The goods need an import licence that only the buyer can obtain.
- The seller is not familiar with the tariff and import rules of the buyer's country.
Common mistakes
- Accepting DDP without checking whether the seller can act as importer in the buyer's country.
- Not pricing in VAT and other taxes.
- Not agreeing who pays for specialised inspections or quarantine in the import country.
- Writing "DDP, VAT unpaid" without clearly defining the scope.
Practice in Vietnam
For imports into Vietnam on DDP terms, the declarant on the import declaration must be an entity that qualifies as importer in Vietnam. An overseas supplier without a Vietnamese entity usually cannot perform true DDP and has to use a Vietnamese party as importer, which raises questions about who can deduct import VAT and who carries legal responsibility for the goods. Goods subject to specialised inspection, licensing or quarantine make it even more complex. Vietnamese exporters selling DDP to the US or Europe must understand importer-of-record rules and taxes in the destination country, or choose DAP as the safer option.
Worked example
A furniture maker in Dong Nai sells to a US retail chain on "DDP Distribution Center Y, Dallas, Texas, USA, Incoterms® 2020". The seller clears export customs, ships from Cai Mep to Long Beach, appoints a US customs broker to clear the goods with the seller acting as importer of record, pays import duties and related fees, then trucks the goods to Dallas. The buyer only unloads at its warehouse. The seller must cost all US duties and charges before quoting.
Frequently asked questions
Does DDP include VAT?
Yes. Under Incoterms 2020, the DDP seller bears all import duties and taxes, including VAT, unless the contract expressly excludes them.
Can an overseas supplier sell DDP into Vietnam?
Only if it has an entity or a party able to act as importer in Vietnam. Otherwise DAP is the better choice.
Who unloads under DDP?
The buyer, unless unloading costs are included in the seller's contract of carriage.
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This content is for general guidance and does not replace legal or banking advice for a specific transaction.
Incoterms® 2020 responsibility matrix
| Rule | Loading at seller's premises | Export clearance | Transport to port/terminal of departure | Loading onto main carriage | Main carriage | Cargo insurance | Unloading at destination | Import clearance | Import duties & taxes | Delivery to final destination |
|---|---|---|---|---|---|---|---|---|---|---|
| EXW | B | B | B | B | B | – | B | B | B | B |
| FCA | S | S | S | B | B | – | B | B | B | B |
| FAS | S | S | S | B | B | – | B | B | B | B |
| FOB | S | S | S | S | B | – | B | B | B | B |
| CFR | S | S | S | S | S | – | B | B | B | B |
| CIF | S | S | S | S | S | S* | B | B | B | B |
| CPT | S | S | S | S | S | – | B | B | B | B |
| CIP | S | S | S | S | S | S* | B | B | B | B |
| DAP | S | S | S | S | S | – | B | B | B | S |
| DPU | S | S | S | S | S | – | S | B | B | S |
| DDP | S | S | S | S | S | – | B | S | S | S |
- S Seller
- B Buyer
- S* Seller obligation (insurance)
- – Not required / negotiable
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