What is delivered duty paid mean

As the seller is arranging transportation and paying for any tariffs and taxes at import, he will charge these costs to the buyer. If he can charge all costs to the buyer, he may have little incentive to keep transportation costs low. This means a relatively higher end-cost for the buyer, compared to when the buyer arranges transportation of the shipment. The seller may also charge the buyer an added cost for the risk surrounding the import procedures. The new Incoterms , which were launched earlier this year by the ICC are now in effect.

The Incoterms , which you can find in our earlier post here , will still be valid. As long as both parties agree to the terms, they are. Eleven different terms are defined in the currently valid Incoterms Read on for a definition of the terms:. The costs for carrying out all the necessary import formalities are expressly excluded. These costs are borne by the buyer, meaning that all duties incurred when importing to the country of destination must be paid by the buyer or the recipient.

What are the consequences for foreign customers? If the recipient is not present at the time of delivery or the outstanding amount cannot be paid, a collection invitation will be left for the consignment. Please note: If you deliver your goods DAP and do not communicate this clearly when the order is placed in the online shop, the resulting customs duties may irritate your foreign customers.

If the good are delivered on a DDP Delivered Duty Paid basis, the seller must deliver the goods at their own expense and risk, to a destination in the import country, taking care of all formalities and paying all import duties in addition to all costs. What does this mean for customers abroad? The buyer no longer incurs any costs on receipt; the goods are delivered as if they were a national consignment.

DDP Incoterms is usually used by a buyer who does not want to enter into any kind of transport contract with any entity and would rather let the seller handle all these responsibilities right up to their door.

This crucial issue must be discussed and agreed upon as part of the sales contract and terms of sale. From above, although it may seem that the buyer has it easy and can take it easy, this may come at a cost. The reason is that in the case of a DDP shipment, the buyer depends totally on the seller to everything from origin door to destination door. This means that the buyer could be at the mercy of the seller in terms of costs as there could be certain costs that the buyer may be better equipped to procure than the seller.

For example, a buyer may have better rates and services at the destination than the seller who is sitting somewhere else and may need to use the services of an agent to do all the work on their behalf.

If you are a seller on DDP Incoterms, then it is advisable that you check and ensure that you or the agent that you may appoint at destinations can handle the import clearance at the destination without incurring unnecessary costs. As a seller under DDP shipping terms, it may also be in your best interest to ensure that you have a reliable freight forwarder or agent at destination who does not take you for a ride and ensures that all costs are verified.

In some countries, the buyer may be eligible for certain tax benefits which could be returned to you as a seller under DDP as agreed with your buyer. If you are selling on DDP shipping terms, your obligation ends with the delivery of the goods at the named place, cleared. But in some cases, you may need the assistance of the buyer in securing some documents required for the local customs clearance.

Remember though, you as the seller are still liable for all costs and risks till the agreed place of delivery. These provisions may provide you with some relief from any unforeseen or reasonably unforeseen circumstances that may prevent you from delivering on DDP shipping terms.

As with all Incoterms , it is important that the point of delivery is expressly discussed and agreed between the buyer and the seller. Fabian Heilemann in Berlin. Sign up Login. Shipping Terms. Deadweight Tonnage DWT. Delivered at Terminal DAT.