Glossary

DDP vs DAP

Two Incoterms 2020 rules: under DDP the seller pays import duty and clears customs, under DAP the buyer handles duty and import clearance.

DDP and DAP are two rules from the ICC's Incoterms 2020 that both deliver goods to a named place in the buyer's country and differ on one point: who clears import customs and pays the duty and taxes. Under DDP, Delivered Duty Paid, the seller does. Under DAP, Delivered at Place, the buyer does.

Under DAP the seller carries cost and risk until the goods arrive at the agreed destination ready for unloading, then the buyer takes over: import clearance, duty, and taxes are the buyer's responsibility. Under DDP the seller goes further, staying responsible until the goods are cleared for import at the destination, so the seller absorbs the customs paperwork, duty, and taxes. Everything up to arrival is the same on both terms; the border is where they split.

In wholesale quotes this is the pair most often confused, and the confusion is expensive. A DDP price should already include destination duty and import VAT, so it looks higher but carries no border surprise. A DAP price looks cheaper because those charges are not in it; the buyer pays them on arrival. Comparing a DDP quote against a DAP quote as if they were like for like understates the DAP landed cost. Before accepting either, confirm which rule the number uses and model the duty and taxes yourself. A landed-cost calculation turns a DAP quote into a comparable all-in figure.

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