Who Pays Customs Duties: Buyer or Seller? (Incoterms Explained)

Whether you pay customs duties comes down to one thing: the shipping terms. Under DDP the seller pays everything; under DAP or DDU the buyer pays at delivery. Here's how to tell which applies to your order.

The Short Answer

Customs duties follow the Incoterm — the standardized shipping term printed on your order confirmation or commercial invoice. Here's who pays under each common term:

• EXW (Ex Works): the buyer pays everything — freight, duties, taxes, and customs clearance — starting from the seller's door.
• FOB (Free On Board): the seller covers freight to the port and export clearance, but the buyer pays the import duty and taxes.
• DAP (Delivered At Place): the seller pays freight to the destination address, but the buyer still pays import duty and VAT when the package arrives.
• DDP (Delivered Duty Paid): the seller pays everything, including duties and taxes, so the buyer owes nothing at delivery.

One note on terminology: DDU (Delivered Duty Unpaid) is the old name for what DAP now covers — under both, the buyer pays. DAP replaced DDU in the Incoterms 2010 rules, so you'll rarely see DDU on modern invoices, but you may still find it on older order confirmations.

What Happens at Customs

To understand why you sometimes get a bill, it helps to know what actually happens at the border. Customs won't release a shipment until the import duty on it is settled, and waiting for the buyer to pay customs directly would hold packages up for days. So carriers like DHL and FedEx advance the duty payment to customs on your behalf, then bill you — the importer — afterward.

That's why you can pay for shipping and still get a DHL or FedEx duty invoice: the shipping charge covers freight, while duties and taxes are a separate, government-imposed charge that someone has to settle. The carrier's bill usually arrives by email or text with a payment link, or the courier collects the amount at the door.

DDP: The Seller-Pays Model (and Why Merchants Love It)

With DDP (Delivered Duty Paid) shipping, the seller prepays import duties and taxes so the price you see at checkout is the final price — nothing more to pay when the package arrives. The seller clears customs and settles the charges before delivery, which is why DDP orders never produce surprise duty bills.

Merchants love DDP for the same reason buyers do: no surprise charges means fewer refund requests, fewer disputes, and less cart abandonment on international orders. See our full guide to DDP shipping for how the model works end to end.

Real-World Examples

Here's how the buyer-versus-seller question plays out in practice:

• UK to Ireland: since Brexit, shipments into Ireland face EU import duty and Irish VAT. Unless the seller ships DDP, the buyer pays the charges when the package arrives.
• US to Canada: goods by mail under CAD 20 are exempt, courier shipments under CAD 40 — above those, GST/HST applies, with gifts by mail exempt up to CAD 60 — and the buyer pays at delivery unless the seller used DDP. See our guide to Canadian import duties for the full breakdown.
• China to US: since the US suspended the $800 de minimis exemption in August 2025, every commercial shipment pays duties on arrival regardless of value — plus any China-specific Section 301 surcharges.

Frequently Asked Questions

Who pays customs duties, the buyer or the seller?

It depends on the Incoterm and shipping terms: under DDP the seller pays all duties and taxes; under DAP or DDU the buyer pays when the package arrives. Carriers like DHL and FedEx usually collect the buyer's payment at delivery or via a payment link.

Do I have to pay customs charges from the UK to Ireland?

Yes — since Brexit, goods shipped from the UK to Ireland are subject to EU import duty and Irish VAT, and the buyer is responsible unless the seller ships DDP (see our UK to Ireland customs charges guide).

Why did DHL charge me duties when the seller said shipping was paid?

'Shipping paid' only covers freight. Duties and taxes are separate unless the terms are DDP — check your order's terms. Sellers using DDP prepay everything, so you owe nothing at delivery.

Related guides: Customs Charges from the UK to Ireland · What is DDP Shipping? · DHL Import Duty

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