Import Duty Responsibility Under DDP, DAP, and EXW Incoterms

Incoterms 2020 11 Jul 2026 9 min read

Quick answer

Under Incoterms DDP, DAP, and EXW, the responsibility for paying import duty varies significantly. Generally, under DDP, the seller pays import duty; under DAP, the buyer pays import duty; and under EXW, the buyer bears maximum responsibility, including import duties.

Key takeaways

Incoterms define the allocation of costs and risks between seller and buyer, including import duty responsibilities.
Delivered Duty Paid (DDP) places full import duty responsibility on the seller.
Delivered at Place (DAP) requires the buyer to pay import duties upon importation.
Ex Works (EXW) places maximum import duty responsibility on the buyer, including customs clearance.
Import duty amounts depend on customs valuation rules and may include additional anti-dumping or countervailing duties.
EU businesses must ensure proper customs declarations, EORI registration, and compliance with duty payment obligations.
Accurate record-keeping of customs documents and invoices is essential for audit and compliance purposes.

Incoterms and Import Duty: The Fundamentals

Incoterms are internationally recognised commercial terms that allocate responsibilities between sellers and buyers in cross-border transactions. Among these responsibilities is the payment of import duties, which are customs charges levied by the importing country on goods entering its territory.

For companies operating within the EU single market, understanding who pays import duty under specific Incoterms is crucial for compliance and cost management. The three Incoterms most relevant to import duty allocation are Delivered Duty Paid (DDP), Delivered at Place (DAP), and Ex Works (EXW).

Import duty itself is a charge imposed by the customs authorities of the Member State where goods are imported. It is calculated based on the customs value of the goods, which generally includes the transaction price plus certain adjustments as defined in the Union Customs Code and its implementing regulations. Additional duties such as anti-dumping or countervailing duties may also apply depending on the product and origin ^[1]^[2]^[3]^[4]^[5].

DDP (Delivered Duty Paid): Seller’s Full Responsibility

Under the DDP Incoterm, the seller assumes maximum responsibility, including the payment of import duties. This means the seller is responsible for delivering the goods to the agreed destination in the importing country and bears all costs and risks, including customs clearance and payment of import duties and taxes.

In practice, for an EU business importing goods under DDP terms, the seller (often the non-EU exporter) must arrange and pay the import duty to the customs authorities of the Member State where the goods enter free circulation. The buyer receives the goods without further import duty obligations at the point of delivery.

This arrangement simplifies the import process for the buyer but requires the seller to be familiar with the EU customs procedures, including the need for an EORI number, customs declarations, and payment of duties. The seller must also ensure compliance with any additional import charges such as anti-dumping or countervailing duties, which may require presentation of specific commercial invoices with declarations as stipulated in EU implementing regulations ^[1:1]^[2:1]^[3:1]^[4:1]^[5:1].

DAP (Delivered at Place): Buyer’s Import Duty Obligation

Delivered at Place (DAP) shifts the responsibility for import duties to the buyer. Under DAP, the seller delivers the goods to a named place in the importing country but does not clear the goods for import or pay import duties.

For EU businesses receiving goods under DAP terms, this means that upon arrival, the buyer must handle customs clearance formalities and pay all applicable import duties and taxes to the relevant Member State customs authority. The buyer must ensure they have the necessary EORI registration and submit the customs declaration accurately to avoid delays or penalties.

The buyer’s obligation to pay import duty under DAP makes it essential to budget for these costs and to understand the applicable duty rates, which depend on the product classification, customs value, and any additional duties imposed under EU law.

EXW (Ex Works): Maximum Buyer Responsibility for Import Duty

Ex Works (EXW) places the greatest responsibility on the buyer, including the payment of import duties. Under EXW, the seller makes the goods available at their premises, and the buyer assumes all costs and risks from that point onwards.

For EU businesses importing goods under EXW terms, this means the buyer is responsible for arranging transport, export and import customs clearance, and payment of all import duties and taxes. The buyer must ensure compliance with the Union Customs Code requirements, including having an EORI number and submitting customs declarations to the competent national authority.

Because the buyer handles import duties under EXW, they must be fully aware of the customs valuation rules and any applicable additional duties such as anti-dumping or countervailing duties that may affect the total import cost ^[1:2]^[2:2]^[3:2]^[4:2]^[5:2].

Determining Customs Value and Duty Amounts

Import duty calculation in the EU is based on the customs value of the goods, which is generally the price actually paid or payable for the goods when sold for export to the EU, adjusted as necessary according to the Union Customs Code and Implementing Regulation (EU) 2015/2447.

In cases involving processed products or goods subject to inward processing procedures, specific methods such as the quantitative scale or value scale methods are applied to determine the proportion of goods subject to duty ^[6].

Additionally, certain sectors may have specific rules for calculating import duties. For example, in the cereals sector, import duties are fixed based on intervention prices and market prices, with maximum limits set by the Common Customs Tariff ^[7].

The duty rates applied depend on the product classification under the Combined Nomenclature (CN) and the applicable Common Customs Tariff. Import duties may be supplemented by additional charges such as anti-dumping or countervailing duties imposed to protect EU industries from unfair trade practices. These additional duties require presentation of specific commercial invoices with official declarations to customs authorities to apply reduced rates or exemptions ^[1:3]^[2:3]^[3:3]^[4:3]^[5:3].

Special Considerations: Anti-Dumping and Countervailing Duties

Anti-dumping and countervailing duties are additional import charges imposed by the EU to counteract unfair trade practices such as dumping or subsidies by exporting countries.

These duties are imposed following investigations and are regulated by specific Commission Implementing Regulations. For example, definitive anti-dumping duties on certain steel products or countervailing duties on products like pneumatic tyres or battery electric vehicles require importers to present valid commercial invoices with official declarations certifying the origin and production details of the goods ^[1:4]^[2:4]^[3:4]^[4:4]^[5:4].

Failure to present such documentation results in the application of the highest duty rates. These duties are payable upon importation and are in addition to standard customs duties, thereby increasing the total import cost.

EU businesses importing under any Incoterm must be aware of these additional duties and ensure compliance with the documentation requirements to benefit from any reduced rates or exemptions.

Practical Steps for EU Businesses

EU businesses importing goods under DDP, DAP, or EXW must take several practical steps to ensure compliance with import duty obligations:

Identify Incoterms in Contracts: Clearly establish which Incoterm applies to determine who pays import duty.
EORI Registration: Ensure the business has a valid Economic Operators Registration and Identification (EORI) number for customs procedures.
Customs Declarations: Prepare and submit accurate customs declarations to the relevant Member State customs authority.
Duty Calculation: Understand the applicable customs value and duty rates, including any additional anti-dumping or countervailing duties.
Documentation: Obtain and retain all necessary commercial invoices and certificates required for customs clearance and duty assessment.
Budgeting: Account for import duties and related taxes in cost calculations and pricing strategies.
Engage Customs Experts: Consider consulting customs brokers or legal experts to navigate complex import duty rules and ensure compliance.

Record-Keeping and Compliance

Maintaining thorough records of all import-related documents is essential for compliance and audit purposes. EU businesses should keep:

Customs declarations and entry summaries.
Commercial invoices with any required official declarations.
Proof of payment of import duties and taxes.
Correspondence with customs authorities.
Documentation related to any additional duties such as anti-dumping or countervailing duties.

These records must be retained for the period prescribed by the relevant Member State’s customs legislation and be readily available for inspection.

Proper record-keeping supports compliance with EU customs regulations and helps resolve any disputes or queries regarding import duty payments.

FAQ

How do I know if I have to pay import duty?
Whether you pay import duty depends on the Incoterm agreed with your supplier and your role in the transaction. Under DDP, the seller pays; under DAP and EXW, the buyer pays import duty. You must also consider the customs procedures in the EU Member State where goods are imported ^[1:5]^[2:5].

Who pays import duty, buyer or seller?
Who pays import duty depends on the Incoterm used. The seller pays under Delivered Duty Paid (DDP), while the buyer pays under Delivered at Place (DAP) and Ex Works (EXW) terms ^[1:6]^[2:6].

Who pays the tax on imported goods?
Import taxes, including customs duties and VAT, are generally paid by the party responsible for import clearance. Under DDP, this is the seller; under DAP and EXW, it is the buyer ^[1:7]^[2:7].

Who is supposed to pay import duty?
The party responsible for import duty payment is determined by the contractual Incoterm. Sellers pay under DDP, and buyers pay under DAP and EXW. It is essential to confirm this in the sales contract to avoid disputes ^[1:8]^[2:8].