DDP - Delivered Duty Paid
VAT : Be clear whether or not this includes VAT at destination. If your buyer insists that it does you may need to register for VAT in the destination country. This could involve the use of a VAT agent or fiscal representative.
DUTY : A common scenario is that the buyer will not pay the duty (if any). DAP becomes DDP. Duty may be less than you thought. Say, for example you sell something worth £1000 DDP and the duty is now 10%. This will cost you £100 in duty, right? Wrong!
DDP includes non-dutiable freight costs and the duty itself. In this example we first take off the freight after importation, call it £100. We then take off the duty at 10%. Leaving you a value for duty of £818.18. Apply the duty and you have £81.82 duty to pay. Roughly 1.8% less than you may have thought.
These are just a couple of reasons why we think DDP is problematic. Avoid if possible, or speak to us about a 'work around' solution.
