Delivered Duty Unpaid (DDU)
DDU is an incoterm* that specifies that the seller is responsible for delivering the goods to the buyer, but the buyer is responsible for paying any customs duties and taxes. The advantage having the recipient pay customs duties and taxes is that the exporting company (seller) doesn’t have to pay upfront charges and rather the buyer takes on those costs.
The challenge with the DDU approach is that if the recipient is not on file with customs already, there can be a lack of communication leading to customs delays. Customs will not release a shipment until they have confirmed the billing information of the recipient is on file. They buyer can also encounter surprise fees that they did not anticipate.
Delivered Duty Paid (DDP)
Delivered Duty Paid (DDP) is an incoterm that specifies that the seller is responsible for delivering the goods to the buyer, including paying any customs duties and taxes. The seller assumes all of the costs and risks associated with delivering the goods to the buyer, including any potential delays or issues with customs duties and taxes.
For the buyer, DDP can be a convenient solution, as they do not have to worry about paying customs duties and taxes or dealing with any potential issues related to these costs. This might also mean the seller embeds these customs charges into the price of the product.
*Incoterms are published by International Chamber of Commerce.