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Duties and Taxes: DDP vs DDU Explained
Understand delivered duty paid vs unpaid and choose the right option.
January 9, 20261 min read22 views
DDP vs DDU: Which to Choose?
Incoterms determine who pays duties and taxes.
Definitions
| Term | Who Pays Duties | Risk Transfer |
|---|---|---|
| DDU | Buyer | At delivery |
| DDP | Seller | At delivery |
| DAP | Buyer | At delivery |
Customer Experience Impact
| Factor | DDU | DDP |
|---|---|---|
| Surprise fees | Yes | No |
| Delivery delays | Possible | Rare |
| Refusal rate | 5-15% | Under 1% |
| Satisfaction | Lower | Higher |
Cost Comparison
| Scenario | DDU Cost | DDP Cost |
|---|---|---|
| $50 item to UK | $15 ship | $15 ship + $10 VAT |
| Customer pays | $10 VAT + $5 fee | Nothing |
| Total to customer | $65 + $15 | $75 |
When to Use Each
DDU:
- Price-sensitive markets
- B2B transactions
- High-value items
- Customer preference
- Premium customer experience
- Competitive markets
- Under duty thresholds
- Repeat customers
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