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Your customer in Zurich is looking forward to their parcel. Then the courier rings the bell and asks for money first. For customs duty, import VAT and a handling fee that nobody mentioned at checkout. Whether it comes to that is decided by two abbreviations: DDP and DAP.
Both come from the Incoterms and determine who pays duties and taxes when you ship to a country outside the EU. In this article, you'll learn what DDP and DAP mean, how they differ and which option is better for your online store.
Key takeaways
- DDP (Delivered Duty Paid): You as the seller cover customs duty, import VAT and import clearance. Your customer pays nothing on delivery.
- DAP (Delivered at Place): You deliver to the door, but your customer pays duties and import taxes on delivery, often plus a handling fee.
- This only matters for deliveries to countries outside the EU, such as the UK, Switzerland or Norway. Within the EU, no customs duty applies.
- For online stores, DDP is usually the better customer experience. DAP saves you effort but often costs you returns and reviews.
What are Incoterms?
Incoterms are delivery terms published by the International Chamber of Commerce (ICC). They define who bears which tasks, costs and risks when goods are transported. The current edition is Incoterms 2020 with eleven rules (ICC). In classic B2B trade, they're written into the sales contract. In e-commerce, they mostly show up in one question: does your customer have to pay extra at the door? For an overview of other logistics terms such as FOB, read our article Logistics terminology: Milkrun, FOB logistics and DDP shipping.
DDP and DAP: what they mean
DDP: Delivered Duty Paid
With DDP, you as the seller take care of everything: you clear the goods through customs in the buyer's country, pay the duties and taxes and obtain the necessary authorizations (Cambridge University Procurement). For your customer, it feels like a domestic order: they pay the price shown in your store, and that's it.
DAP: Delivered at Place
With DAP, you also deliver the goods to the destination. But once they arrive, customs clearance in the importing country is the buyer's job, and so are the duties and taxes (Cambridge University Procurement). In e-commerce, that means your customer pays customs duty and import VAT on delivery, usually to the carrier.
DDP vs. DAP: the difference at a glance
| DDP | DAP | |
|---|---|---|
| Who pays customs duty and import VAT? | You as the seller | Your customer |
| Who handles import clearance? | You (or your service provider) | Your customer (or the carrier on their behalf) |
| Surprises at the door | None | Duties plus handling fee |
| Effort for you | Higher: calculate duties, possibly register in the destination country | Lower |
| Risk of refused deliveries | Low | Higher |
What DAP really costs your customers: two examples
United Kingdom: For consignments up to £135, you charge UK VAT at the point of sale. For consignments over £135, normal import rules apply, with import VAT and, where relevant, customs duty (GOV.UK). If you ship DAP, your customer pays these charges plus a handling fee: Royal Mail charges £8, Parcelforce £12, and for goods over £900 it's £25 (Royal Mail). If the charges aren't paid, Parcelforce holds the parcel for 21 days and then returns it to the sender (Parcelforce). Everything else you need to know about selling to the UK is in our guide Selling to the UK from the EU.
Switzerland: According to the Swiss consumer protection foundation (Stiftung für Konsumentenschutz), Swiss Post charges 13 CHF per parcel plus 3% of the goods value for customs clearance on shipments from the EU. If VAT and duty come to less than 5 CHF, nothing is charged. Other carriers such as UPS or FedEx, however, charge their fees even below this threshold.
For smaller orders, the fee can make up a noticeable share of the order value. If your customer refuses the parcel because of it, it comes back to you. That means return shipping, extra work and a disappointed customer who won't order again any time soon.
DDP or DAP: which is better for your online store?
DDP is right for you if you sell regularly to a non-EU country, your brand wants to stand out through the shopping experience and you can build the charges into your prices. Your customer sees the final price in your store and gets no surprises.
DAP can make sense if you're only testing a new market, ship there occasionally, or your customers are mostly businesses that can reclaim import VAT and know the process. In that case, state clearly in your store that charges will be due on delivery.
Important for DDP: Depending on the destination country, you may need to register for tax there, for example for UK VAT on direct sales up to £135 (GOV.UK). The UK government plans to remove the customs duty relief for consignments up to £135 by March 2029 (DWF). Clarify the details before you start, ideally with your tax advisor.
Putting DDP into practice
- Show final prices in your store: Build duties, import VAT and fees into your prices per destination country, or calculate them at checkout.
- Choose the right shipping service: Check whether your carrier offers a DDP service for the destination country, where the charges are billed to you instead of your customer.
- Keep your customs data clean: Tariff code, product description, value and origin must be correct for every product. Our article Customs form made easy: CN23 guide shows how this looks on the customs declaration.
- Consider a warehouse in the target market: If you sell a lot to one country, a local warehouse can settle the question entirely. You import your stock once in bulk and deliver like a local retailer.
Conclusion: DDP is usually the better customer experience
DDP and DAP answer the same question, with very different consequences for your customers. DAP saves you effort but moves the costs and the frustration to the doorstep. DDP makes international orders as easy as domestic ones, which is why it's the better choice for most online stores as soon as they sell regularly to non-EU countries.
With byrd, you store your goods in a network of 12 fulfillment centers in the EU and UK (byrd) and ship with several carriers. For the UK, you can also keep your stock directly in a warehouse in the UK, so your British customers face neither customs duty nor charges at the door. You decide which products you store where and see stock, orders and shipments at any time in one dashboard.
Note: This article provides an overview and is not a substitute for tax or customs advice.
FAQ: DDP and DAP
What does DDP mean?
DDP stands for Delivered Duty Paid. The seller takes care of transport, export and import clearance as well as customs duty and import VAT up to the destination.
What does DAP mean?
DAP stands for Delivered at Place. The seller delivers to the destination, while the buyer handles import clearance and pays the import charges.
What's the difference between DDP and DAP?
The difference lies in the import: with DDP, the seller pays customs duty and import VAT; with DAP, the buyer does. In both cases, you or your carrier deliver to the destination.
Do I need DDP or DAP within the EU?
No. No customs duties apply within the EU. The question only arises for deliveries to countries outside the EU, such as the UK, Switzerland or Norway.
Is DDP more expensive than DAP?
For you as the seller, yes, because you cover the charges. Overall, though, DDP can be cheaper if it leads to fewer refused deliveries, returns and support requests.