DAP vs DDP: who pays duties when you export outside the EU

The first question a foreign buyer asks a Spanish supplier is rarely about the product. It is "does your price include duties?" The answer is a three-letter code on the invoice, and getting it wrong is the fastest way to turn a good sale into a refused delivery or a surprise invoice. This article explains the Incoterms 2020 rules in plain language, why we ship on DAP terms, what to tell your customer before you close the sale, and gives you sentences you can paste into the offer.

Incoterms 2020 in plain language

Incoterms are eleven three-letter rules published by the International Chamber of Commerce (ICC). The current edition is Incoterms 2020 (ICC, Incoterms 2020, verified 22 October 2026). Each rule answers three questions for a sale of goods: who pays for which leg of the transport, where the risk of loss passes from seller to buyer, and who clears the goods for export and for import. They say nothing about ownership, payment terms or what happens if the goods are faulty; that belongs in the contract. A rule is written as the code plus a named place, for example "DAP Monterrey, Incoterms 2020"; the place is part of the rule.

For a Spanish SME selling a finished product to a customer outside the EU, four rules cover almost every case:

DAP or DDP: the only real difference is import clearance

Under both rules you deliver to the customer's door. The difference is who stands in front of the destination customs. With DAP, your customer (or their broker) is the importer of record: they file the import declaration, pay the duty and the local VAT or sales tax, and sign for the goods. With DDP, you would have to do that from Spain, which means being accepted as importer in a country where you have no company, no tax number and no broker, and paying taxes you cannot recover. The ICC's own guidance is that DDP should not be used when the seller cannot obtain import clearance in the destination country, and that if the parties want the buyer to bear the import side, DAP is the rule to use.

DDP also hides a cost problem. The duty depends on the HS code, the declared value and the rules in force on the day of entry; the tax depends on the destination. A seller who quotes DDP has to guess all of that months before the goods arrive, and absorbs the difference if the guess is wrong. Since 29 August 2025 the US applies duty from the first dollar, after suspending the $800 de minimis exemption, and its rates changed several times through 2026: a DDP price agreed in January can be wrong by March.

Why we ship DAP

Our door-to-door service is quoted on DAP terms, and it is a deliberate choice rather than a limitation:

• The import tax is usually recoverable by the buyer, not by you. A company registered in Mexico credits the 16% import VAT it pays on the pedimento; a Spanish seller with no Mexican tax registration has no way to do that. The same logic applies wherever the buyer is registered for VAT or GST.
• Many countries require the importer to be local and registered. In Mexico a commercial import is filed by a licensed customs agent for a company on the Padrón de Importadores; in the US the importer of record needs an EIN on file with CBP. Your customer already has these; you do not.
• You do not advance a tax you cannot control. Our quote covers collection, packing if needed, export documentation, air freight and delivery. Everything that destination customs assesses is paid by the receiver, at the real rate on the real day.

What to tell your customer before closing the sale

Most refused deliveries come from a buyer who did not expect to pay anything on arrival. Five points, said before the order is confirmed, prevent almost all of them:

1. The price is DAP. Transport to their door is included; import duties, taxes and the broker's fee are not, and are paid by them.
2. They will be the importer of record. They need whatever their country asks of an importer: an EIN in the US, the Padrón de Importadores and a customs agent in Mexico, a Business Number with an import account in Canada.
3. They can estimate the landed cost in advance. Give them the HS code and the invoice value; their broker can quote the duty and tax before they confirm.
4. Origin can help, but only where there is an agreement. Genuine EU-origin goods can enter Canada, Mexico or Israel at a preferential rate if the origin statement is on the invoice; nothing of the sort exists for the US.
5. Duty paid at import is not refunded on a return. If the customer sends the goods back, the destination customs does not automatically give the duty back. In the US, a refund on rejected or returned merchandise is only possible through a formal drawback claim: the importer must notify CBP on Form 7553 at least 5 working days before the goods are re-exported or destroyed, show that they were defective, non-conforming or shipped without consent, and claim within the statutory period (eCFR, 19 CFR 190.42, verified 22 October 2026). For a one-off SME order that is rarely worth the cost, so treat an export sale as close to final and agree the return policy in writing.

Sentences you can paste into the offer

These are plain commercial wordings, not legal text; have your adviser check them if the contract is large.

• In the quote: "Prices are quoted DAP [city, country], Incoterms 2020. Transport to your address is included. Import duties, taxes and customs brokerage at destination are not included and are payable by the buyer."
• On the order confirmation: "The buyer acts as importer of record and is responsible for import clearance in [country]. Please send us your importer identification number [EIN / RFC / Business Number] and your customs broker's contact so that the shipment can be cleared without delay."
• Before dispatch: "The goods are classified under HS [code], declared value [amount] [currency], origin [country]. Your broker can confirm the duty and tax due on entry. Delivery is to [address]; someone must be available to receive the goods."
• On returns: "Import duties and taxes paid at destination are not refundable by the seller. Returns must be agreed in writing before the goods are sent back."

What we do

For companies in Spain, we take the shipment from your door to your customer's on DAP terms: we collect at your warehouse or office, or you bring the goods to our warehouse; we pack or palletize if needed; we prepare all the export documentation; we fly boxes and pallets; and we deliver door to door. Import duties and taxes at destination are paid by the receiver. We coordinate carriers and warehouses and work with the customs agent at destination; we are not a customs broker, and the customs information above is for planning, not advice. Lithium batteries, perfume, aerosols and chemicals can fly too: we run the dangerous-goods process in Spain and a DG specialist quotes the repacking. We reply within 24 business hours.

See also: export from Spain to the USA, export from Spain to Mexico and dangerous goods by air from Spain.