Q – Should shipments under Incoterms® Rules Delivered Duty Paid (DDP) terms be used?
A – We advise companies to avoid DDP unless there is a very good business reason to use it and you are able to fulfil the obligations of the importer in the destination country. The DDP Incoterms® Rule makes the exporter the Importer of Record (IOR) which means they are liable for duty and tax. As the IOR, exporters also become liable for all the import documentation that would be required to clear the goods. Often, you will also find that the IOR must be “established” in the country of import, which can mean physically present or at the very least officially registered as a business, including being registered to pay taxes such as VAT. Check import requirements for every shipment very carefully before agreeing to this term.
It’s imperative that all employees within an internationally trading company have a clear understanding of using and applying the Incoterms® 2010 rules to suit their business needs. Update your knowledge of Incoterms at our next Training seminar taking place on the 6th March 2018.
Bookings can be made by contacting Stephanie Warrington on 01254 356473 or firstname.lastname@example.org