Loading the player...

What Is 'Delivered Duty Paid - DDP'?

Delivered duty paid (DDP) is a delivery agreement whereby the seller assumes all of the responsibility, risk and costs associated with transporting goods until they are received or transferred by the buyer. This includes paying for shipping costs, export and import duties, insurance and any other expenses incurred during shipping to an agreed-upon location in the buyer's country. 

BREAKING DOWN 'Delivered Duty Paid - DDP'

Delivered duty paid (DDP) is a shipping agreement that places the maximum responsibility on the seller. In addition to shipping costs the seller is obligated to arrange for import clearance and payment of taxes and/or import duty.

The seller arranges for transportation through a carrier, which can be of any kind. The seller is responsible for the cost of the carrier and acquiring customs clearance in the buyer's country including obtaining the appropriate approvals from the authorities in that country. In addition, the seller may need to acquire a license for importation. However, the seller is not responsible for unloading the goods.

Policies vary among companies, and all payment details should be understood and agreed upon before the transaction is finalized. For example, DDP next to an item on a web-based ecommerce site indicates that all duties have been paid. In a DDP transaction, if the goods are damaged or lost in transit, the seller is liable for the costs.

Seller Responsibilities

The seller’s responsibilities include providing the goods; drawing up a sales contract and related documents; export packaging; arranging for export clearance and all import, export and customs requirements and paying for all transportation costs including final delivery to an agreed-upon destination. In addition, the seller must arrange for proof of delivery and pay the cost of all inspections. The seller must alert the buyer once the goods have been delivered to the agreed-upon location.

Shipping Requirements

DDP shipments require that the shipper obtain customs clearance. Prior to sending DDP shipments, the seller must determine the local customs requirements of the destination country. However, it is not always possible for the shipper to clear the goods through customs in foreign countries.

Customs requirements for DDP shipments vary by country. In some countries, import clearance procedures are complicated and lengthy and should be arranged by the buyer who has intimate knowledge of the process. If a DDP shipment does not clear customs, customs may ignore the fact that the shipment is DDP and cause a delay in shipment. Depending on the decision by customs, this may result in the seller using different delivery methods and require additional costs.

  1. Carriage Paid To (CPT)

    Carriage Paid To (CPT) is an international trade term denoting ...
  2. Free Carrier - FCA

    Free carrier (FCA) is a trade term specifying a delivery location ...
  3. Seller's Call

    An agreement between a buyer and a seller for a specific grade ...
  4. Seller

    A seller is an entity who writes an option contract and collects ...
  5. Incoterms

    Incoterms are published by the International Chamber of Commerce ...
  6. Carriage And Insurance Paid To ...

    Carriage and Insurance Paid To (CIP) is when a seller pays freight ...
Related Articles
  1. Insights

    Tips For Face-to-Face Buying And Selling

    Be aware of these dangers when buying or selling goods in person.
  2. Investing

    Key Home Upgrades That Make Or Break The Deal

    When making a home purchase, pay attention to key features of the home that either should meet a certain standard or should be upgraded by the seller.
  3. Investing

    4 Ways Millennials Can Buy Private Businesses

    Buying private businesses is a good way to have greater control over your investments while increasing your income and avoiding the fluctuations of the market.
  4. Investing

    Home Sale Contingencies: What Buyers And Sellers Need to Know

    Home sale contingencies protect buyers who want to sell one home before purchasing another. Find out what buyers and sellers need to know about these contractual conditions.
  5. Investing

    Real Estate Flipping: 8 Disclosures You Must Make

    If you don't tell potential buyers about these situations and possible hazards, you could find yourself in court. Here's how to profit – and stay out of trouble.
  6. Investing

    Investors: You Are Responsible For Your Investments

    Should you leave it all up to your broker or take the reins yourself? Striking a happy medium will provide the best returns.
  7. Investing

    Understanding The Escrow Process

    Learn the 10 steps that lead up to closing the deal on your new home and taking possession.
  8. Investing

    Rent-to-Own Homes: How the Process Works

    A rent-to-own agreement, also called a lease option or lease-to-own agreement, offers an alternative way to buy a home.
  1. What are the Differences Between Ex Works (EXW) and Free On Board (FOB)?

    Ex Works describes the situation where the seller is responsible for having her goods ready at her place of business. Free ... Read Answer >>
  2. What is the difference between CIF and FOB?

    Learn about the differences between FOB and CIF international trade agreements and the advantages and disadvantages for sellers ... Read Answer >>
  3. Are the laws on delivery duty paid different in every country?

    Learn about the differences in delivery duty paid (DDP) between countries. Find out how some countries implement regulations ... Read Answer >>
  4. Are there international maritime laws that govern delivery duty paid?

    Learn about the interaction of international maritime laws and delivery duty paid. Find out more about the distinguishing ... Read Answer >>
  5. What costs are included in Free on Board (FOB) shipping?

    Find out about free on board shipping, the obligations of parties involved and the costs each party must assume. Read Answer >>
Hot Definitions
  1. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  2. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  3. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  4. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
  5. Annuity

    An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income ...
  6. Restricted Stock Unit - RSU

    A restricted stock unit is a compensation issued by an employer to an employee in the form of company stock.
Trading Center