Incoterms
DDP (Delivered Duty Paid)
Incoterm under which the seller delivers the goods cleared for import, with duty and VAT paid, to a named place.
In four languages
DDP is the seller's maximum obligation: it carries all costs and risks to the named place, clears import customs and pays duty, import VAT and other taxes. It looks simple for the buyer, but in the Gulf it often hides a problem. To be importer of record in the UAE or Saudi Arabia, the seller needs a local trade licence and customs code, and a VAT registration to recover import VAT. A Chinese supplier usually has none of these, so clearance happens in someone else's name, which raises compliance questions and can make the VAT unrecoverable. Example: a VAT-registered Dubai company is offered DDP door delivery by a supplier. It chooses DAP instead, clears in its own name, and uses the reverse charge for import VAT.
Questions
Is DDP a good choice for importing into the UAE?
It can work for small shipments, but if you are a VAT-registered business, DAP with you clearing in your own name is usually cleaner.
Who pays VAT under DDP?
The seller pays import duty and VAT under DDP, but if it is not the registered importer the VAT may not be recoverable by either party.