DDP vs DAP: Who Pays EU Import Charges?
When you ship from outside the EU to a European customer, someone has to pay the import VAT, any customs duty and the carrier's fees for handling them. Your shipping terms decide who that is. This comparison explains DDP and DAP in plain language, shows how each one feels to your customer and helps you choose. It is general information, not legal or tax advice, so check the details with official sources or a customs specialist before you change how you ship.
Key takeaways
- Under DAP (Delivered at Place), the buyer pays import duties and taxes on arrival. Under DDP (Delivered Duty Paid), the seller pays them.
- Surprise charges at the door are a common cause of refused parcels and costly returns.
- For consignments of €150 or less, IOSS lets you collect VAT at checkout, which gives the customer a DDP-like experience.
- DDP needs accurate costs and paperwork up front. DAP is simpler for you but shifts friction to the customer.
- Whichever you choose, say it clearly on your product pages and at checkout.
Many small sellers outside the EU, in the UK, the US and elsewhere, start by shipping the same way they ship at home. The first European orders go out, and then a few come back: refused by customers who did not expect to pay anything more when the parcel arrived. That is usually the moment sellers discover Incoterms, the trade terms that decide who pays for what along the way.
You do not need to master every Incoterm to sell online. For most consumer parcels, the choice comes down to two: DAP and DDP. This article compares them side by side, explains how IOSS and the new low-value parcel duty fit in and gives you a simple way to decide.
What DDP and DAP actually mean
Incoterms are standard trade terms published by the International Chamber of Commerce (ICC). They set out who handles transport, risk and costs between seller and buyer. Carriers and marketplaces use the same labels, so it helps to know exactly what they mean.
DAP: Delivered at Place
With DAP, you pay to get the goods to the buyer's named place, usually their home address. The buyer is responsible for import clearance costs: import VAT, any customs duty and, in practice, the fee the carrier charges for handling those payments. The carrier often collects these from the customer before or at delivery.
DDP: Delivered Duty Paid
With DDP, you take on everything, including the import charges. The customer receives the parcel without paying anything extra. You either pay the charges through your carrier's duty-paid service, which then bills you, or you collect the right amount at checkout and settle it yourself.
In consumer ecommerce, people often use "DDP" loosely to mean any setup where the customer pays nothing at the door, and "DAP" or "DDU" for setups where they might. DDU (Delivered Duty Unpaid) is an older term that was dropped from the official Incoterms, but some carriers still use it in their menus. Read your carrier's service description rather than relying on the label alone.
DDP vs DAP side by side
Here is how the two options compare from a small online seller's point of view.
| Question | DAP | DDP |
|---|---|---|
| Who pays import VAT and duty? | The buyer, on arrival | You, the seller |
| Who pays the carrier's clearance fee? | Usually the buyer | Usually you, or it is built into your duty-paid rate |
| Customer experience | Possible surprise charge before delivery | Parcel arrives with nothing more to pay |
| Risk of refused parcels | Higher, especially if charges were not explained | Lower |
| Your admin | Simpler: accurate customs paperwork only | More: calculating and funding charges, possible registrations |
| Pricing | Your price looks lower but the total is not final | Your price must cover the charges |
| Cash flow | You do not front import charges | You pay charges, sometimes before you are paid back |
Neither option is wrong. DAP is legal and common. The question is whether the friction it creates for your customers costs you more than the admin of DDP.
Common mistake
Shipping DAP without telling the customer. EU consumer rules expect online prices to include VAT and all unavoidable charges, and delivery costs to be clear before checkout. Even where import charges are technically the buyer's to pay, a customer who finds out only when the courier asks for money is likely to refuse the parcel, ask for a refund or leave a bad review.
Where IOSS fits in
Since 1 July 2021, VAT is due on every import into the EU. The old €22 exemption ended on that date. At the same time, the EU introduced the Import One-Stop Shop (IOSS) for business-to-consumer imports in consignments worth €150 or less.
With IOSS, you charge VAT at checkout at the rate of the buyer's country and declare it monthly through the IOSS scheme. Your parcel carries your IOSS number, so it clears customs without the buyer paying VAT on delivery. For low-value parcels, this is effectively a DDP experience for the VAT part.
A few points to keep in mind:
- IOSS is optional. Without it, VAT and any charges are collected from the buyer at import, often with a carrier handling fee. That is the DAP experience.
- Non-EU sellers usually need an intermediary. Sellers established outside the EU generally must appoint an EU-established intermediary to use IOSS. A few countries with EU mutual assistance agreements are exceptions, and the UK is not one of them.
- Marketplaces can change the picture. When a marketplace facilitates the sale of low-value imported goods, it is treated as the supplier for VAT, the "deemed supplier", and handles the VAT. Check what your marketplace covers.
- Above €150, IOSS does not apply. Normal import rules take over, and customs duty may also apply depending on the product's tariff classification and origin.
The new €3 duty on low-value parcels
From 1 July 2026, a temporary €3 customs duty applies to low-value items, worth up to €150, imported into the EU from outside. It mainly affects ecommerce parcels. The European Commission describes it as an interim measure ahead of the full removal of the €150 duty exemption under the EU customs reform, and sources point to it running until 1 July 2028.
The duty is charged per item according to tariff classification, not per parcel. For example, five T-shirts in one parcel incur €3, while three T-shirts and a watch incur €6, because they fall into two tariff categories. The seller or importer declares and pays it in the customs process.
This matters for your DDP or DAP decision in two ways:
- It adds another line to your costs. If you ship DDP or use IOSS, you need to price this in, so the customer still pays nothing at the door.
- Accurate tariff classification matters more. The number of distinct tariff categories in a parcel affects the amount, so product descriptions and codes need to be right.
A separate handling fee for low-value parcels has also been proposed. Rules in this area are moving, so check the European Commission's latest guidance before you set prices.
Pro tip
Keep a simple product sheet with each item's customs description, HS code, country of origin and value. It speeds up every customs form, helps your carrier calculate charges correctly and makes it much easier to switch between DAP and DDP later.
How to choose: a simple decision path
Work through these steps for your typical European order.
- Look at your order values. If most orders are €150 or less per consignment, IOSS can remove the VAT surprise. If many are above €150, you are dealing with full import rules, possibly including duty.
- Check your products' classification and origin. Find the HS code and the EU's 8-digit Combined Nomenclature code for each product, and confirm where it was made. This tells you whether customs duty may apply and roughly what you need to plan for.
- Ask your carriers what they offer. Many express carriers and some postal services have duty-paid services for consumer parcels. Ask how charges are calculated, how you are billed and what happens if a figure is wrong.
- Work out the real landed cost. Add VAT, any duty, the €3 low-value duty where it applies and clearance fees to your shipping cost. Then decide whether to absorb it, build it into prices or show it at checkout.
- Test the customer journey. Place a test order to an EU address, or ask a friend there, and see what they are asked to pay and when.
- Write it down clearly. Put your approach on product pages, the shipping page and the checkout, in plain words.
Example
Imagine a small US shop selling candles to customers in Germany and Belgium. Orders are usually small, well under €150. At first the shop ships DAP, and some customers refuse parcels when asked to pay VAT and a handling fee. The owner registers for IOSS through an EU intermediary, adds VAT at checkout based on each customer's country, includes the new per-item duty in the price and updates the shipping page. The numbers in this example are made up, but the pattern is common: fewer refusals, clearer prices and slightly more admin each month.
Pros and cons of each approach
If you are still on the fence, this summary may help.
Why sellers choose DDP
- No surprise charges for customers
- Fewer refused parcels and returns
- The price customers see is the price they pay
- Feels like buying from a local shop
Why sellers stay with DAP
- Less admin and no need to calculate charges
- No need to front import costs
- Fewer registrations, such as IOSS, to manage
- Reasonable for B2B buyers used to import paperwork
A hybrid is also common: IOSS for parcels of €150 or less, so customers pay nothing at the door, and DAP with very clear warnings for larger orders. As your European sales grow, some sellers move further and hold stock inside the EU, which removes import charges per parcel but brings other obligations, such as VAT registration where the stock is stored.
Your shipping terms action plan
- List your typical EU order values and how many exceed €150
- Record the HS code, origin and customs description for each product
- Check whether you have an EORI number if you need one for your shipments
- Ask at least two carriers about duty-paid options for EU consumers
- Decide whether IOSS through an intermediary makes sense for you
- Price in VAT, duty and the €3 low-value duty where they apply
- Explain clearly on product pages and at checkout who pays what
- Place a test order and review the customer experience
Frequently asked questions
Is it legal to ship DAP to EU consumers?
Yes, DAP is a recognized trade term and many sellers use it. What causes trouble is not being clear. Consumer rules expect total prices and delivery costs to be shown before purchase, so explain any import charges the buyer may have to pay before they order.
Does IOSS cover customs duty too?
IOSS is a VAT scheme. It covers VAT on low-value imports. Customs duty is a separate matter, including the new €3 per-item duty on low-value parcels from 1 July 2026, which is declared and paid in the customs process. Ask your carrier or intermediary how they handle both.
What happens if a customer refuses a DAP parcel?
The parcel is usually returned to you or, in some cases, held or disposed of according to the carrier's terms. You may pay return shipping and lose the original postage. Under EU consumer law, the customer may also be entitled to a refund in some situations, so prevention through clear information is cheaper than cure.
Do UK sellers face the same choice?
Yes. Since 1 January 2021, goods moving from Great Britain to the EU are exports with customs declarations, and EU VAT applies in the buyer's country. UK sellers face the same DAP versus DDP choice, and the UK is not one of the countries exempt from appointing an IOSS intermediary.
Related reading
The bottom line
DAP puts import charges on your customer, while DDP puts them on you. For consumer parcels into the EU, surprise charges at the door are the real cost of DAP, so many small sellers move toward DDP, or at least use IOSS for orders of €150 or less. Whatever you choose, know your landed costs, keep your customs data accurate and tell customers plainly what they will pay.
Import rules for low-value parcels are changing, and VAT and customs are applied by national authorities. This is general information, not legal or tax advice. Check the European Commission's guidance, GOV.UK if you ship from the UK, and your carrier, or speak to a customs specialist before you commit to a setup.
