"DAP" versus "DDP"
Mike Stokes
Retired Export Adviser. Author of "Positive Networking", "The Intrepid Exporter" and "Posh Claret"
Before the UK left the EU, it really wasn’t that important whether the agreed terms were “DAP” or “DDP”. This is because, before January 2021, UK exports to the EU did not incur any customs clearance charges, nor any import duties, nor any import VAT. That all changed as a result of Brexit.
When UK exporters supply under “DAP” terms, they are responsible for loading costs, freight costs and insurance premiums – and that is it. They do not need an EU EORI number and they do not need to register for VAT in the EU.
When UK exporters supply under “DDP” terms, in addition to the above they are now responsible for customs clearance charges (so they need an EU EORI number), any import duties and import VAT. To reclaim the import VAT they must register with their customer’s local equivalent of HMRC and submit local VAT returns.
Supplying under “DDP” is far more onerous, and costly, but it does make for a much more comfortable buying experience for the customer.
?Other exporting hints and tips can be found in my book, “The Intrepid Exporter”