DDP vs DAP comes down to who deals with import customs. Under DAP (Delivered at Place), the seller delivers to your door, but you clear the goods through customs and pay any duty and import VAT. Under DDP (Delivered Duty Paid), the seller does that too, so the goods arrive cleared and duty paid. DDP is simpler for a small clothing brand; DAP gives you more control and lets a VAT-registered importer reclaim import VAT.
This guide explains DDP vs DAP under Incoterms 2020, how they compare with EXW, FOB and DPU, who pays for freight, insurance, customs, duty and import VAT, and where risk passes. It also covers UK and EU rules after Brexit and walks through one order shipped both ways.
What Incoterms are and why they matter
Incoterms are trade rules published by the International Chamber of Commerce (ICC). The current set is Incoterms 2020, which has 11 rules. Each rule is a three-letter code that tells buyer and seller who arranges transport, who handles export and import customs, who pays which costs, and the exact point where risk passes from seller to buyer.
Incoterms do not set your price or payment terms; those belong in your purchase order. Always write the rule, a named place and the version together, for example “DDP, your warehouse address, Incoterms 2020”.
DDP and DAP explained
DAP: Delivered at Place
The seller arranges and pays for transport to a named place, usually your warehouse, studio or fulfilment centre. The seller handles export clearance in the country of origin. Delivery happens when the goods reach the named place, still on the arriving vehicle and ready to unload. Risk passes to you at that moment.
You unload the goods, clear them through import customs and pay any duty and import VAT. Because clearance usually happens at the port, before final delivery, you carry the risk of border delays.
DDP: Delivered Duty Paid
DDP is DAP plus import. The seller arranges transport to the named place, clears the goods for export and import, and pays duty and import taxes. The seller, or an agent working for them, is the importer. It is the rule with the most obligations for the seller. You still unload, unless the transport contract includes it.
DDP only works when the seller can legally act as importer in your country. Ask whether unloading is included so you do not pay for it twice.
EXW, FOB and DPU in brief
You will see three other rules in clothing quotes.
- EXW (Ex Works): The seller makes the goods available at its own premises. You arrange everything else: loading, export clearance, freight, import clearance, duty and VAT. It is hard to manage without a freight forwarder in the country of origin.
- FOB (Free on Board): For sea and inland waterway transport only. The seller clears the goods for export and loads them on board the vessel at the named port. Risk passes once the goods are on board. You pay sea freight, insurance, import clearance, duty and VAT. ICC suggests FCA for container shipments, but FOB is still common in garment quotes.
- DPU (Delivered at Place Unloaded): Like DAP, but the seller also unloads the goods at the named place. It is the only Incoterm where the seller unloads. Import clearance, duty and VAT stay with you. DPU replaced the older DAT rule in Incoterms 2020.
Only two Incoterms, CIF and CIP, oblige the seller to buy insurance for the buyer. Under the five rules in this guide nobody has to insure, so the party carrying the risk in transit usually buys cover for itself.
Who pays what: DDP vs DAP and the other rules
The table shows the default split under Incoterms 2020.
| Task or cost | EXW | FOB | DAP | DPU | DDP |
|---|---|---|---|---|---|
| Export clearance | Buyer | Seller | Seller | Seller | Seller |
| Main freight | Buyer | Buyer | Seller | Seller | Seller |
| Cargo insurance (optional) | Usually buyer | Usually buyer | Usually seller | Usually seller | Usually seller |
| Risk passes | At seller’s premises | On board at origin port | At named place, before unloading | At named place, after unloading | At named place, before unloading |
| Unloading at destination | Buyer | Buyer | Buyer | Seller | Buyer |
| Import clearance | Buyer | Buyer | Buyer | Buyer | Seller |
| Import duty | Buyer | Buyer | Buyer | Buyer | Seller |
| Import VAT | Buyer | Buyer | Buyer | Buyer | Seller |
| Importer of record | Buyer | Buyer | Buyer | Buyer | Seller |
Who is the importer of record?
The importer of record is the party named as importer on the customs declaration. It answers for the declaration, pays duty and import VAT, and keeps the records. Under EXW, FOB, DAP and DPU that is you. Under DDP it is the seller or its agent.
This matters for VAT. In the UK, import VAT is recorded against the importer’s EORI number. A VAT-registered importer can usually use postponed VAT accounting: you declare and reclaim the import VAT on the same VAT Return, so no cash is paid at the border. Under DDP the import VAT is the seller’s, so you cannot reclaim it as your own; the seller builds duty and taxes into its price.
DDP vs DAP for small clothing brands: pros and cons
DDP
- One landed price: Goods, freight, duty and import taxes in one quote, which makes costing easier.
- No customs work: You do not need a customs broker, and no duty bill arrives when the goods land.
- Less visibility: You do not see the separate cost of freight, duty and VAT.
- No import VAT reclaim: The import VAT is the seller’s, not yours.
- Reliance on the seller: The seller’s broker chooses the commodity code and handles any customs query.
DAP
- Control: You choose the customs broker and see every line of the declaration.
- VAT recovery: A VAT-registered importer can account for and reclaim import VAT, for example through postponed VAT accounting in the UK.
- Clear costs: You see the real duty and freight on each shipment.
- More admin: You need an EORI number and usually a broker, and you pay their fees.
- Border risk: Delays, inspections and storage charges at the port are your problem.
- Compliance risk: A wrong commodity code or value is your responsibility as importer.
When DAP makes sense
DAP is usually the better choice when most of these are true for your brand:
- You have a customs broker: A broker or freight forwarder already clears your imports and knows your products.
- You are VAT registered: You want to reclaim import VAT yourself rather than pay a price that includes the seller’s taxes.
- You import regularly: Control over commodity codes and preference claims pays off across many shipments.
- You consolidate: You combine goods from several suppliers into one shipment or one clearance.
- You can receive freight: Your warehouse or fulfilment partner can unload pallets or cartons and deal with carriers.
If few of these apply, DDP saves time and avoids mistakes, especially on a first order. For more on choosing where to produce for each market, see our pages on clothing manufacturing for UK brands and clothing manufacturing for European brands.
UK and EU notes after Brexit
- EORI numbers: To import into Great Britain you usually need a GB EORI number, which starts with GB. Imports into the EU need an EORI number issued by an EU member state, which is valid across the EU. Under DAP you are the importer, so you need the right one. Under DDP the seller or its agent needs it.
- UK import VAT: Import VAT is charged at the same rate as on a UK sale of the same goods. The standard rate, currently 20%, applies to most adult clothing. VAT-registered businesses can use postponed VAT accounting instead of paying at the border.
- EU import VAT: Each member state sets its own VAT rate. Some let VAT-registered businesses account for import VAT on their VAT return; check your country’s rules with your broker.
- Customs duty: The UK Global Tariff and the EU Common Customs Tariff set duty by commodity code and country of origin. Preferential schemes can reduce or remove duty for some origins, including Bangladesh, when rules of origin are met. Check current rates on the UK Trade Tariff or the EU TARIC database.
- UK and EU are separate: Since Brexit, goods moving between Great Britain and the EU need customs declarations. Stock delivered to the UK and then sent to EU customers is imported again, so plan where each shipment lands.
Worked example: one order shipped two ways
A UK clothing brand orders a production run of hoodies from a factory in Bangladesh. The goods travel by sea and are delivered to the brand’s fulfilment warehouse in England.
On DDP terms
- Export and transit: The seller clears the goods for export, books and pays the sea freight, carries the transit risk and decides whether to insure.
- Import: At the UK port, the seller’s customs agent files the import declaration as importer and pays duty and import VAT.
- Delivery: The seller’s haulier delivers to the warehouse. Risk passes to the brand when the truck arrives ready to unload.
- Receipt: The warehouse unloads and checks the cartons. The brand has paid only the agreed DDP price.
On DAP terms
- Export and transit: The same as DDP, paid for and risked by the seller.
- Paperwork: The seller sends the commercial invoice and packing list. The brand’s customs broker prepares the import declaration with the brand’s EORI number.
- Duty and VAT: The brand pays the duty, directly or through the broker. As a VAT-registered business it uses postponed VAT accounting, so the import VAT goes on its VAT Return.
- Delivery: Once customs releases the goods, the seller’s haulier completes delivery. Risk passes on arrival at the warehouse.
- Extra costs: The brand pays the broker’s fee and any port storage if clearance is delayed.
Under DDP the brand does no customs work and pays one price. Under DAP it pays duty and broker fees on top of the goods price, but it controls the declaration and can recover the import VAT.
What to put in your tech pack
Customs classification starts with how the garment is made. Our tech pack service covers these points.
- Fibre composition: Percentages for every main fabric and lining. This drives the commodity code, the duty rate and the fibre label.
- Knit or woven: State the fabric construction. Knitted and woven garments sit in different tariff chapters.
- Gender and size range: Men’s, women’s and children’s garments often have different commodity codes.
- Labels: Wording and position for fibre composition, care and country of origin labels.
- Trims and decoration: Zips, prints, embroidery and patches, with their materials.
- Packing: Folding, polybags, units per carton and carton marks, so the packing list matches the goods.
- Destination market: UK, EU or both, so labels and paperwork fit where the goods will be sold.
How Fabrickly can help
Fabrickly is a tech pack and low-MOQ clothing manufacturing studio headquartered in Copenhagen, Denmark, with production at audited partner factories in Bangladesh and China. We offer DDP shipping to the UK and EU, so orders for those markets arrive with import clearance, duty and import taxes handled. Orders start from 50 pieces per style, and sizes can be mixed within the 50. We prepare factory-ready tech packs in 7 days and send an itemised quote within one business day. You get branded samples before bulk, in-line QC during production and an AQL 2.5 final inspection. Standard fabrics are OEKO-TEX Standard 100 certified, with GOTS organic cotton on request, and we offer both private label and full custom cut and sew. To see what your order would look like delivered DDP, send us a quote request.
Frequently asked
Q: Is DDP or DAP better for a small clothing brand?
DDP is usually easier for a first order because the seller handles import customs, duty and import VAT. DAP suits brands that have a customs broker and are VAT registered, because they control the declaration and can reclaim import VAT.
Q: Who pays import VAT under DAP?
The buyer. Under DAP you are the importer, so you pay or account for duty and import VAT. In the UK, VAT-registered importers can usually use postponed VAT accounting to declare and reclaim import VAT on the same VAT Return.
Q: Do I need an EORI number if I buy on DDP terms?
Usually not for that shipment, because the seller or its agent acts as importer. You will need one if you import on other terms such as DAP, FOB or EXW, or if you move goods across the border yourself.
Q: What is the difference between DAP and DPU?
Under DAP the seller delivers the goods ready for unloading and you unload them. Under DPU the seller also unloads at the named place. In both cases you handle import clearance and pay duty and import VAT.
Q: Does Fabrickly offer DDP outside the UK and EU?
Our DDP service covers the UK and EU. For other markets, such as the USA or Australia, ask about shipping terms when you request a quote.
— Hasebul, Fabrickly