DDP shipping, Delivered Duty PaidDDP shipping: Delivered Duty Paid, explained.
DDP shipping means Delivered Duty Paid, the Incoterms 2020 rule with the most duties for the seller, who delivers the goods cleared for import and pays all duty and taxes. Airlift Logistics, a freight forwarder in Dubai, explains how DDP works into the UAE: why the seller needs a UAE importer of record, how 5% duty and 5% VAT are paid, and the risks for both sides.
Seller or buyer: the DDP split
Under DDP the seller carries almost everything. The buyer only unloads and takes the goods.
| Cost or task | Under DDP |
|---|---|
| Export clearance at origin | Seller |
| Main freight to the destination | Seller |
| Insurance | Seller, if wanted (no obligation) |
| Seller | |
| Seller | |
| Delivery to the named place | Seller |
| Unloading at destination | Buyer |
| Seller, until delivered at the place |
How DDP works into Dubai
A foreign seller cannot simply clear goods in the UAE. These are the steps that make DDP work.
- 01
Goods must be declared by a UAE company with a trade licence and a customs client code.
- 02
Dubai Customs charges 5% on most goods, based on the cost, insurance and freight value.
- 03
VAT of 5%
VAT is charged on the CIF value plus duty. A VAT-registered importer can usually reclaim it.
- 04
Delivery to the buyer
After clearance a UAE transporter delivers to the buyer's address.
- 05
Name the place
Write the full destination, for example DDP Dubai Investments Park, Incoterms 2020.
- 06
Check licences
Controlled goods still need permits before clearance, whoever pays the duty.
DDP vs DAP
DAP is the close cousin of DDP. The difference is who handles import clearance and duty.
| Point | DDP | DAP |
|---|---|---|
| Import clearance | Seller | Buyer |
| Duty and VAT | Seller pays | Buyer pays |
| To the named place, cleared | To the named place, not cleared | |
| Risk passes | At the named place | At the named place |
| Needs a local importer | Yes, the seller needs one | No, the buyer clears |
| Good for | Buyers who want a landed price | Sellers who cannot clear in the UAE |
DDP puts the most duties on the seller of all eleven rules. Many sellers choose DAP when they have no local importer.
DDP means Delivered Duty Paid. It is the Incoterms 2020 rule with the most obligations for the seller, who delivers the goods cleared for import at the named destination and pays all freight, duty and taxes. The buyer only has to unload the goods and take them.
- It works for any mode.
- Always name the place.
Yes, but not alone. UAE customs needs a declarant with a UAE trade licence and a customs client code, called the importer of record. A foreign seller must therefore appoint a UAE company, often a freight forwarder, to clear the goods and pay duty on its behalf.
- Ask your forwarder to act as agent.
- The seller still pays the cost.
Most goods pay 5% duty. That is charged on the CIF value, then 5% VAT on the CIF value plus duty. GCC-origin goods and some goods under trade agreements pay less. The seller should quote the duty from the correct HS code before signing the contract.
- Alcohol and tobacco pay more.
- Check the HS code first.
DAP is simpler without a UAE importer. The buyer clears the goods and pays duty. DDP suits sellers who want to offer a landed price and can clear locally. The buyer should check that duty and VAT are really included.
- DAP shifts clearance to the buyer.
- Both deliver to a named place.