Clint Reid

DDU vs DDP (Delivery Duty Unpaid vs Delivery Duty Paid)

DDU and DDP are both incoterms used loosely in the small package industry to describe the party responsible for paying the duties and taxes.

What is DDU?

DDU (Delivery Duty Unpaid): The buyer (receiver) is responsible for all the duties, taxes, and clearance fees.

What is DDP?

DDP (Delivery Duty Paid): The business (seller) is responsible for all the duties, taxes, and clearance fees.

So, why should you care about DDU and DDP?

When selling internationally, someone ultimately has to pay the duties and taxes. So you better know who it is.

When you sell cross-border, the country you ship to may impose duties and taxes on the shipment. Depending on the destination, you will have a choice between DDU or DDP. These applied duties and taxes are largely based on the declared value of what you are shipping. As each country sets its own rules and regulations, you will want to consult with an expert familiar with shipping internationally.

A critical element to selling cross-border is getting rid of surprises for your international customer. International shoppers are savvy; they want a complete understanding of the required fees and what it will take to get the package to their door. Many international shoppers will choose not to purchase if the fees and charges are not clearly communicated. This includes making it clear who is responsible for the duties and taxes.

Should I send my shipment DDU or DDP?

Unless you are feeling really generous, you do not want to pay duties, taxes, or fees on an international order if you have not collected them upfront. If you are new to international shipping or if you are unsure, send it DDU and the receiver will pay duties and taxes when the shipment has cleared customs.

If you collected the duties and taxes or you choose to absorb that cost, then send the shipment DDP.

How do I send a package DDP?

Each shipping system/carrier is slightly different and not all will use the term DDP. The table below illustrates a few common examples of options you may see in your shipping software when creating an international DDP shipment. Keep in mind that DDP is not available for all carriers and services, and the options displayed in your shipping software should reflect that.

The payment of duties and taxes to the destination country will be handled by your carrier, then invoiced to you on a separate freight bill. You will first often see shipping charges invoiced with a separate invoice for duties, taxes, and clearance fees to come later.

There is an exception to this process that only impacts large shippers to Australia. If you ship more than A$75,000 worth of goods annually into Australia, then you are expected to remit tax directly to the Australian government on DDU and DDP shipments. This is a new law that was enacted in July of 2018 and needs to be understood if your annual shipments to Australia are over A$75,000.

DDP shipping platform DDP shipping platform description Selector
DDP with Ship Station Bill duties and taxes to payor of shipping charges Checkbox
DDP with UPS Bill Duty and Tax To Dropdown: Shipper
DDP with DHL Online Shipping Bill Duties and Taxes To (In the payment options section) Dropdown: Shipper
DDP FedEx Ship Manager Bill duties/taxes/fees Dropdown: Shipper

Are there fees associated with sending a shipment DDP?

Yes. Sending a shipment DDP includes the entire total landed cost i.e. duties, taxes, DDP fee, advancement fee, and possible brokerage fees. In the U.S., UPS and DHL both charge a $15 DDP fee as seen below; FedEx and other international mail providers do not charge a fee. Keep in mind that fees assessed and terminology used can vary between carriers and the country you are shipping from. Zonos recommends you have a conversation with your carrier representative to fully understand the fees applicable to you. It’s also worth asking your representative for waivers and/or reductions on these fees.

Carrier DDP description DDP fee
UPS Duty and Tax Forwarding Surcharge $15 USD
DHL Duties and Taxes Paid (DTP) $15 USD
FedEx Bill Duty and Tax to Shipper $0 USD
If you are interested in learning more about how to manage international eCommerce for your business, please visit our Zonos Docs for further information.