A note for sellers who like the sound of one number that includes everything. In cost terms, DDP is often the right answer. In compliance terms, it is a structure — and a structure can break quietly. A Shenzhen seller discovered this two years in, when the tax authority asked for the import records behind the duty that had been "included" all along.

The scene, anonymised

A seller of household goods shipped DDP into two EU countries for two years. The price per kilo included duty and VAT, and the invoices said so. When the audit came, three things were missing: the seller was not the importer of record, so no import VAT had ever been assessed against its own number; the declared value had been estimated by product category rather than taken from the commercial invoice; and the importer named on the entries was a company the seller had never contracted with. The assessment, with interest, arrived before any explanation did.

Exposure one: you are not the importer

In DDP the seller is supposed to be the importer of record. In practice the entry is often filed under the forwarder's company, its VAT number or a nominee. That works until it does not: you cannot reclaim import VAT that was never assessed against you, and you cannot produce an entry summary in your own name when someone asks how the goods entered.

Exposure two: the declared value drifts from the invoice

A price per kilo or per category is a commercial convenience, not a customs value. When the declared value is lower than the transaction value, the duty saved today becomes an assessment later, with interest and a penalty attached. The seller pays it, because the seller is the one who sold the goods.

Exposure three: the chain has a company you never met

Some "all-in" arrangements use another party's VAT number, a deferred-payment account or a consolidation scheme. Each is legitimate on its own; each becomes a problem when the chain breaks — a deregistered number, an unpaid deferment, a forwarder that stops answering. The customs debt follows the goods, and the goods were yours.

When not to use DDP at all

  • Products that need a local registration in your own name: cosmetics, food contact, medical devices, some electronics
  • High-value shipments where the import VAT is worth reclaiming
  • Steady volume into one market — at that point the importer account should be yours
  • Any destination where you cannot obtain the entry documents after the shipment

How to use DDP without the exposure

  • Name the importer of record in the contract, in writing, and get the entry summary after each shipment
  • Declare the transaction value from the invoice, not a category estimate
  • Keep the entry, the duty receipt and the invoice together for the retention period — commonly five to ten years, depending on the country
  • Once a year, reconcile what was declared against what was sold

DDP is a good product when the file behind it is clean. Before you renew an all-in rate, ask your forwarder for one recent entry summary and the name on it. If they cannot send it, that is the answer. Send us the destination and the product on WhatsApp and we will tell you which structure fits.