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Incoterms Comparison: DDP vs. DAP—What's the Difference?

On: November 11, 2026 | By: David Noah | 11 min. read

Incoterms Comparison: DDP vs. DAP—What's the Difference? | Shipping Solutions The Incoterms® rules DDP and DAP are very similar: Both can be used with any mode of transport, and both generally transfer the risk of loss of or damage to the goods when they are at the buyer’s disposal at the named destination, ready for unloading. The main difference is import clearance: Under DDP, the seller handles it and pays the import duties and taxes; under DAP, the buyer does. For these reasons, exporters may confuse the two. In this article, I’ll define DDP vs. DAP and share the differences between the two, so you can make an informed decision on which term is the best choice for moving your goods.

Get an overview of Incoterms 2020 that everyone can understand.

What Does Delivered Duty Paid (DDP) Mean?

Delivered Duty Paid (DDP) means the seller delivers the goods at the named destination, cleared for import and ready for unloading from the arriving means of transport. The seller arranges transportation and bears the costs and risks up to delivery, subject to the exceptions in the rules. This Incoterm places the most responsibility on the seller.

DDP Responsibilities and Transfer of Risk

Under the Incoterms® 2020 rules, which remain the current edition as of 2026, DDP requires the seller to:

Arrange transportation to the named place of destination.
Carry out and pay for export, transit and import clearance formalities, where applicable.
Pay applicable duties, taxes and other customs charges.
Bear the risk of loss of or damage to the goods until delivery, subject to the exceptions in the rules.
Place the goods at the buyer’s disposal on the arriving means of transport, ready for unloading.

With DDP, the seller is responsible for import duties and applicable import taxes, including value added tax (VAT), unless the parties expressly agree otherwise in the sales contract. This is extremely risky for the seller, because they may not be fully aware of the import clearance procedures in the country of import or how to find a competent local customs broker. The seller may also face currency exchange risks if freight, duties, taxes or other charges are payable in a foreign currency.

Because of these risks, the seller may want to use the term Delivered at Place (see below) or Delivered at Place Unloaded (DPU).

With DDP, risk generally transfers to the buyer when the goods are at the buyer’s disposal at the agreed destination, cleared for import and ready for unloading. The buyer is responsible for unloading. If unloading charges are included in the seller’s contract of carriage, the seller cannot charge them separately to the buyer unless otherwise agreed.

The destination and delivery point should be stated clearly and precisely in the sales contract and shipping documents, along with the version of the rules—for example, “DDP [buyer’s full delivery address], Incoterms® 2020.”

What Does Delivered at Place (DAP) Mean?

Delivered at Place (DAP) means the seller delivers the goods at the named destination on the arriving means of transport, ready for unloading. The seller arranges transportation and generally bears the transport costs and risks up to delivery, while the buyer handles import clearance and pays the applicable import duties and taxes.

DAP is a flexible term that can be used with any mode of transport or a combination of modes. The named destination could be a port, airport, the buyer’s premises or another agreed location. It does not have to be a foreign destination or a border crossing: Incoterms® rules can also be used in domestic sales.

DAP may sound similar to CPT (Carriage Paid To), and both can be used for multimodal transport. The key difference is when risk transfers: Under CPT, risk passes when the seller hands the goods to the carrier, even though the seller pays for carriage to the named destination. Under DAP, risk generally stays with the seller until delivery at the named destination.

DAP Responsibilities and Transfer of Risk

Under the Incoterms® 2020 rules, the buyer is responsible for unloading and for carrying out and paying for import clearance, including applicable duties, taxes and import-related inspection fees. If a customs broker is needed, the buyer arranges for one.

The seller handles export and transit clearance, where applicable, and must assist the buyer, at the buyer’s request, risk and cost, with documents or information needed for import clearance.

The seller is not required to unload the goods. However, if the seller’s contract of carriage includes unloading charges at the place of delivery, the seller may not recover those charges separately from the buyer unless the parties agree otherwise. Paying an unloading charge does not by itself move the unloading risk back to the seller.

With DAP, risk generally transfers when the goods are at the buyer’s disposal at the agreed destination, ready for unloading. Import clearance costs remain the buyer’s responsibility even if clearance takes place before the goods reach that destination.

Download the free Incoterms 2020 Chart of Responsibilities.

What Is the Main Difference Between DDP and DAP?

The main difference is who handles import clearance and pays the applicable import duties and taxes. Under DDP, those responsibilities belong to the seller. Under DAP, they belong to the buyer.

Both rules generally transfer risk at the named destination, with the goods ready for unloading. Under both rules, the buyer is responsible for unloading; unloading charges may already be included in the seller’s transport contract.

DDP vs. DAP: Which Should You Use?

Because of the complex bureaucracy of import clearance procedures, the challenges of arranging customs clearance in destination countries, and a potential lack of knowledge around current import duty rates and rate changes, DDP can be an extremely risky term for the seller to choose. Exporters should be wary of using it without first confirming they can meet its obligations.

Before agreeing to DDP, confirm that the destination country’s customs and tax rules allow the proposed import arrangement. Choosing DDP does not itself authorize a U.S. seller to act as an importer or override local legal requirements. For example, HMRC imposes specific representation requirements on businesses not established in the UK that import into Great Britain.

If you do decide to use DDP but want to exclude VAT, agree on that variation explicitly in the sales contract. Specify exactly which tax is excluded, who will pay it, and whether delivery and risk transfer remain unchanged.

DDP can simplify the buyer’s arrangements, but the buyer must depend on the seller to successfully navigate these challenges.

Using the Incoterm DAP can be a better choice for an exporter who wants control over freight but wants the buyer to handle import clearance, duties and taxes. Confirm that the buyer is willing and able to meet those responsibilities.

DDP and DAP Frequently Asked Questions (FAQs)

What are the risks for sellers when using DDP?

The primary risk for sellers who use DDP is the complexity of import clearance procedures. Finding reliable customs brokers in destination countries can be difficult, and sellers may not have a good understanding of import duties.
What are the risks for buyers when using DAP?

Buyers using DAP are responsible for unloading the goods at the named place of destination and clearing customs for importation. They need to ensure they have the necessary resources, including a competent customs broker, to handle import procedures, entry fees, duties, taxes, inspection fees and potential storage fees if goods are not released promptly.
Can sellers choose DAP instead of DDP to reduce risks?

Yes, sellers who want more control over the shipment and to avoid the complexities and risks associated with import duties and taxes often prefer DAP over DDP. By selecting DAP, sellers can still oversee the transportation process while shifting the responsibility for import clearance to the buyer.
Which party is responsible for insurance under DDP and DAP?

Under both DDP and DAP, the seller is not obligated to provide insurance coverage for the goods. However, it is recommended for both parties to agree on insurance coverage to protect against loss or damage during transit.
Are DDP and DAP suitable for all types of shipments?

DDP and DAP can be used for any mode of transportation (DAP is ideal for us in multimodal transport), but they may not be suitable for every situation. Consider the nature of the goods, the destination country's customs regulations, and the parties' capabilities and preferences when choosing an Incoterm.
Can the seller choose between DDP and DAP?

Though the seller often proposes the Incoterm to use, it is essential to consider the buyer's preferences and the specific requirements of the trade transaction. Both parties should agree on the chosen Incoterm to avoid misunderstandings or disputes.
Are DDP and DAP suitable for both international and domestic shipments?

For companies in the United States, Incoterms—including DDP and DAP—are primarily used for international trade. Terms defined under the Uniform Commercial Code are more commonly used domestically. However, there is no reason that Incoterms can't be used for a domestic shipment as long as both parties agree to the use of the term chosen. In other regions of the world, Incoterms are more commonly used for domestic shipments. When used domestically, there are some responsibilities defined under each of the terms like customs clearance that are simply ignored because they don't apply.
Who is responsible for arranging customs clearance under DDP and DAP?

Under DDP, the seller is responsible for arranging and covering the costs of customs clearance in the buyer's country. Under DAP, the buyer is typically responsible for customs clearance.
Can the buyer request additional services or modifications under DDP and DAP?

DDP and DAP define minimum obligations and responsibilities of the seller and the buyer. Additional services or modifications beyond these terms can be negotiated between buyer and seller. It's important to clearly document any additional agreements or requirements in the sales contract to avoid misunderstandings.

Learn More about Incoterms 2020 Rules

If you are regularly involved in international trade, you need to understand the risks and responsibilities as defined by Incoterms 2020 rules, not just pick the term you always use. Start by getting a copy of ICC's Incoterms® 2020 Rules book.

For a more detailed understanding of which term or terms make the most sense for your company, register for an Incoterms® 2020 rules seminar or webinar offered by International Business Training. You can also read our articles about each of the Incoterms 2020 rules here:

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This article was first published in July 2022 and was updated on October 13, 2026, to clarify responsibilities under the Incoterms® 2020 rules.

About the Author: David Noah

As president of Shipping Solutions, I've helped thousands of exporters more efficiently create accurate export documents and stay compliant with import-export regulations. Our Shipping Solutions software eliminates redundant data entry, which allows you to create your export paperwork up to five-times faster than using templates and reduces the chances of making the types of errors that could slow down your shipments and make it more difficult to get paid. I frequently write and speak on export documentation, regulations and compliance issues.

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