The trade term decides who clears the goods. The importer’s status decides who can recover the tax. On shipments into the European Union and the United Kingdom, what fails is rarely the clause itself — it is that nobody named in the file is entitled to act as importer. These are the nine questions that reached this desk most often this year, in the order they usually arise.
1. FOB, CIF, DDP or DDU — where does each one stop in the EU?
FOB ends at the port of shipment: the buyer books the ocean leg, files the import declaration and pays duty and VAT. CIF adds freight and marine insurance to the named destination port, but the buyer still clears and still pays. DDU — written DAP since 2020 — delivers to a named place without import clearance, so the buyer needs an EORI number and a local VAT registration before the truck arrives. DDP is the only one of the four in which the seller’s side files the declaration and pays duty and import VAT, and that step requires a status, not a price.
2. What is an EORI number, and who has to hold one?
The EORI is the operator identification the EU and UK customs issue to anyone declaring goods. An EU EORI is issued by one member state and recognised in all of them; since Brexit the UK issues its own GB numbers, with XI for Northern Ireland. One legal entity, one number. Declaring under somebody else’s number is not a shortcut: in the customs system that is an import in that party’s name, and the liability attaches there.
3. Under DDP into the EU, whose EORI clears the goods?
Three arrangements, and they differ mainly in who can recover the VAT (question 5).
| Importer of record | Who pays the tax | Who can deduct VAT | |
|---|---|---|---|
| Buyer supplies EORI and VAT number | buyer’s name, seller files | seller, as agreed in writing | buyer |
| Provider’s local entity or nominal importer | provider | provider | provider |
| Seller registers an entity at destination | seller | seller | seller |
The first suits a buyer already registered for VAT; the second is the fastest to set up, but the tax receipt is in the provider’s name; the third takes longest to arrange and is the cleanest answer once volume is regular.
4. How is import VAT built into a DDP price?
The base is the customs value at the border: goods, international freight, insurance and duty, and in some member states destination charges as well. Standard rates across the EU run from 17% to 27% by country, so the figure depends on where the goods enter, not where they were made. A quote that says “taxes included” should also say which country, which rate it reserved and which exchange rate date it used — otherwise the difference at clearance becomes an argument rather than a calculation.
5. Can the import VAT be recovered?
Only against a receipt issued to the importer of record. If the goods were imported in the provider’s name, the receipt is in that name and a VAT-registered buyer cannot offset it: in cash terms the tax is paid twice, once inside the DDP price and once in the buyer’s own return. This belongs in the contract, not in the discovery phase of a quarterly filing.
6. What is postponed VAT accounting?
In the UK, a VAT-registered business can use postponed VAT accounting: import VAT is declared and recovered on the same return, so it is never paid up front. In the EU, most member states allow an import VAT deferment licence, but only for an importer registered for VAT there. No local registration means no deferment, and the tax is paid at the border.
7. Is IOSS the same thing as DDP?
No. IOSS is a VAT collection mechanism for low-value B2C consignments into the EU — goods not exceeding EUR 150 — with the VAT charged at the point of sale. DDP is a trade term that says who clears and who pays. A EUR 200 shipment cannot travel on IOSS and is declared as a normal import; a EUR 30 shipment can be sold DDP and still leave the VAT question to whoever holds the IOSS number. The term and the tax mechanism are two separate decisions.
8. The term says DAP but the buyer has no VAT number. What happens?
The goods arrive and there is no one entitled to declare them, so they sit. Storage accrues by the day. Although the risk sits with the buyer on paper, the container is on a routing the seller arranged, so in practice the seller is the one chasing it. One question before booking — “send me the EORI and the VAT number at destination” — prevents most of the week that follows.
9. What belongs on the invoice and in the contract?
- The edition and the term with a precise named place: “DAP Rotterdam, Incoterms® 2020”, not “DAP Europe”.
- Both parties’ names, addresses, EORI and VAT numbers.
- Goods value split from freight and insurance, because the customs value is built from them.
- Under DDP, a line naming the importer of record and where the tax receipt is sent.
The problem is rarely the clause. It is the status behind it
A clause can be drafted beautifully, but an EU import needs an importer that exists: an EORI, a VAT registration, and someone who carries the declaration. Getting those three aligned before the container leaves is worth more than two points on the freight rate. Send us the lane, the commodity, the value and the destination postcode, and we will set DDP and DAP side by side with the taxes and the paper trail named. For a live shipment, message the operations desk on WhatsApp: +86 135 0963 1114.