Legal Definitions - delivered duty paid

Delivered Duty Paid (often abbreviated as DDP) is a shipping agreement term used in international trade that places the maximum responsibility on the seller for getting goods to the buyer's specified location. Under a DDP agreement, the seller covers all costs and risks involved in transporting the goods, including export and import customs clearance, payment of all duties and taxes, and delivery to the final agreed-upon destination in the buyer's country. The risk of loss or damage to the goods transfers from the seller to the buyer only when the goods are made available to the buyer at the named destination, cleared for import, and ready for unloading.

Here are some examples illustrating how Delivered Duty Paid works:

• Example 1: Importing Manufacturing Components

  A bicycle manufacturer in France orders specialized carbon fiber frames from a supplier in Taiwan under a Delivered Duty Paid agreement. The Taiwanese supplier is responsible for packaging the frames, arranging international ocean freight, handling all customs procedures in both Taiwan and France, paying any import duties or value-added taxes (VAT) in France, and ensuring the frames arrive safely at the French manufacturer's factory. The French manufacturer only takes responsibility once the frames are delivered to their receiving dock, cleared for import, and ready to be unloaded.

  This illustrates Delivered Duty Paid because the Taiwanese seller bears all costs and risks, including international shipping, customs clearance, and all taxes and duties, until the goods are physically delivered to the buyer's premises in France.

• Example 2: International E-commerce Purchase

  An online clothing boutique based in Italy sells a designer handbag to a customer in the United Kingdom, specifying "Delivered Duty Paid" shipping. The Italian boutique must manage all aspects of the shipment. This includes packaging, arranging the courier, completing export declarations, handling UK import customs, and paying any UK duties, taxes (like VAT), or brokerage fees. The UK customer receives the handbag at their doorstep without any unexpected charges or customs hassles, as all these responsibilities and costs were borne by the Italian seller until the handbag was delivered.

  This demonstrates DDP as the Italian seller ensures the product reaches the UK customer's address with all import duties and taxes already paid, providing a seamless delivery experience for the buyer.

• Example 3: Large-Scale Industrial Equipment Procurement

  A mining company in Canada purchases a custom-built, heavy-duty conveyor system from a manufacturer in Germany with a Delivered Duty Paid contract. The German manufacturer is obligated to transport the massive components from its factory, arrange their shipment by sea, manage all port logistics, clear Canadian customs, pay any applicable import duties and taxes in Canada, and then arrange for their final overland transport to the mining company's designated remote site in Canada. The Canadian company only assumes responsibility for the conveyor system once it has arrived at the site, cleared customs, and is ready for installation.

  This example highlights DDP because the German manufacturer takes on the entire burden of logistics, customs, and taxes for a complex, large-scale shipment, ensuring the equipment arrives at the remote Canadian site fully cleared and ready for the buyer.