by Renee

2 min reading time

What is DDP (Delivered Duty Paid) Delivery?

earnings

DDP, or Delivered Duty Paid delivery, refers to a shipment where the sender is responsible for paying any import duties and taxes. Normally, these costs are passed on to the recipient, but with this type of delivery, the sender takes on this responsibility. Import duties or import costs are indirect taxes on goods that are brought into a country. Brexit has made this topic relevant for many online sellers.

DDP versus DAP: What’s the Difference?

In international transport of goods, the terms DDP (Delivered Duty Paid) and DAP (Delivered At Place) are important. The crucial difference between DDP and DAP is who is responsible for the import duties:

  • DAP: The recipient pays the import duties. This is referred to as DAP in the Incoterms, a standard for international transport.
  • DDP: In this Incoterm, the sender takes responsibility for any import duties.

If you receive a package from outside the EU, it’s usually sent based on DAP, and the import duties are passed on to you, the recipient. That’s why it has become so relevant for online sellers after Brexit!

Why Choose DDP Delivery?

DDP delivery offers several advantages, especially from a commercial standpoint. If the recipient cannot afford the import costs, the shipment is not handed over. This can be avoided by choosing DDP, where the sender pays the import duties. This ensures that the customer has immediate access to the shipment without any extra payment. As a seller, you can then choose to pass these costs on to the customer or pay them yourself.

How Do You Calculate Import Duties and VAT?

It’s not easy to calculate customs import duties/VAT via a formula. It is advisable to contact the customs in the destination country or to use websites like Invoercalculator.nl. With this, you can calculate import duties and VAT in advance if you import goods to the Netherlands or Belgium.

Conclusion

DDP delivery is an important consideration for international shipping, where the sender takes responsibility for import duties and taxes. It simplifies the delivery procedure and can be attractive from a commercial perspective. The choice between DDP and DAP depends on various factors, including customer preferences and the ability to calculate and manage import duties.

Selling in England?

Then, in addition to choosing between the above types of shipping, you must have an English VAT number. And file VAT returns. Staxxer can help with that. We take the complexity of VAT off your hands, so you can focus on what really matters: growing your business.

Have questions, or want more information? Schedule a meeting, and let’s see which solution best fits your company.

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Yonis Brander

VAT consultant

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