The short version
DDP and DAP are Incoterms 2020 delivery terms. In both, the seller arranges and pays for carriage to a named destination. The split is at the border:
- DDP (Delivered Duty Paid). The seller clears the goods for import and pays the duty and import taxes. The buyer pays nothing extra on delivery.
- DAP (Delivered At Place). The seller delivers to the named place but does not clear for import. The buyer pays import duty, taxes, and clearance, usually collected by the carrier at the door.
Who pays what
Incoterms 2020. Risk transfers to the buyer at the named destination under both terms; the difference is who handles and pays for import.
When to use DDP
DDP when the buyer should never think about customs. That is most direct-to-consumer selling: a shopper who pays you at checkout does not expect a second bill from the courier three days later. DDP folds the duty into the price they already agreed to, which means fewer refused parcels, fewer chargebacks, and fewer angry reviews. The cost: you carry the duty, so your landed-cost math has to be right, and that math starts with an accurate HS code.
When to use DAP
DAP when the buyer is set up to handle import, which is common in business-to-business trade. A company with its own customs broker or a deferment account often prefers to clear goods itself, reclaim import VAT, and control the process. DAP is simpler for the seller because you stop at the border. It is the wrong choice for a consumer who has no idea a duty bill is coming.
Why both still need an HS code
The Incoterm decides who pays. The HS code decides how much. It sits on the customs declaration in both cases:
- Under DDP, you need the right code to quote an accurate landed price. Guess low and the duty eats your margin; guess high and you lose the sale.
- Under DAP, your buyer needs the right code so the carrier does not overcharge them at the border, then bounce the parcel back to you.
A wrong code is expensive under either term. It just changes who eats the cost. If you sell on Shopify, see how the code feeds duties at checkout in our Shopify HS code guide.
Get the code, then pick the term
Classify the product first, then decide DDP or DAP with real numbers in front of you.
- Free HS code lookup to get the 6-digit code and a duty estimate.
- How to read an HS code if you want the background.
- Pricing for written reports and bulk catalog classification.