- Who Pays Customs Duties for International Express Delivery?
The payer of customs duties for international express delivery is not fixed. They are primarily determined by prior agreement between the sender and recipient or based on the logistics terms, following the principle of “who declares, who agrees, who pays.”
In this article, Weefreight will provide a detailed analysis, which we hope will be helpful.
Recipient Pays (Default Common Scenario)
This is the most common model. If the sender does not make specific arrangements at the time of shipment and does not select a logistics service that includes customs duties, the customs duties are generally borne by the recipient. Upon customs clearance at the destination, customs will calculate the customs duties based on the value, type of goods, and local tax rates. The courier will notify the recipient of the payment before delivery is completed. If the recipient refuses to pay, the goods may be detained, returned, or destroyed, and the sender will still be responsible for any subsequent return fees and storage fees.
Sender Pays
Senders can proactively request to cover customs duties before shipment. They must inform the courier in advance and select the appropriate service (such as the DDP terms mentioned below). This is common in cross-border e-commerce retail and gift delivery scenarios. By covering customs duties, the sender improves the recipient’s experience and avoids delivery failures due to customs issues.
Third-Party Payment
In rare cases, customs duties may be paid by a third party other than the sender or recipient (such as a partner freight forwarder or overseas branch). This requires prior consultation and confirmation with the courier and third party to clarify payment responsibilities and procedures.
II. Cost Differences between DDP and DDU
DDP and DDU are commonly used INCOTERMS in international trade. The core difference lies in whether the seller/sender bears all responsibilities and costs for the goods arriving at the destination. The specific cost differences are primarily reflected in the following three aspects:
- Different Core Responsibilities and Cost Scopes (the key factor in determining the difference in total costs)
DDU (Delivered Duty Unpaid)
The shipper’s (seller’s) responsibilities and costs only extend until the goods arrive at the designated destination. These costs include domestic transportation, export customs clearance, and international transportation. However, they do not include import duties, value-added tax, customs clearance fees, and other “import costs” at the destination. These import costs must be paid by the consignee (buyer) upon customs clearance. Furthermore, any storage fees incurred due to the consignee’s failure to clear customs in a timely manner are also the consignee’s responsibility.
Simply put, the total cost of DDU is “the sender pays the ‘pre-arrival charges’, and the recipient pays the ‘import charges after arrival’.”
DDP (Delivered Duty Paid)
The sender (seller) bears all responsibilities and costs for transporting the goods from the point of departure to the designated destination. This includes not only the domestic transportation, export customs clearance, and international transportation costs covered by DDU, but also import duties, VAT, customs clearance fees, and even possible storage fees (if the shipment is delayed due to the sender’s fault). The recipient does not have to pay any additional fees and simply accepts the goods at the designated location.
Simply put, the total cost of DDP is “the sender pays everything, and the recipient receives the goods ‘free of charge’.”
- Total Cost: DDP is significantly higher than DDU
Because DDP includes core costs such as import duties and VAT, which are normally borne by the recipient, its total cost is typically much higher than DDU.
The exact amount of the difference depends on the value of the goods (duties and VAT are typically calculated as a percentage of the value of the goods, with rates varying across countries. For example, VAT in Europe is generally 19%-23%, while US tariffs range from 0%-25% depending on the product category), the product category (some goods may be subject to additional anti-dumping duties and consumption taxes), and the destination country’s customs clearance policies (such as whether there are any customs clearance fees). For example, a shipment of electronics worth $1,000 shipped to Germany might cost approximately $300 under DDU (shipping + export customs clearance only). DDP would add 19% VAT ($190), 5% tariff ($50), and $50 in customs clearance fees, bringing the total cost to $590—nearly double the DDU cost.
- Risks and hidden costs are borne differently.
With DDU, the recipient bears the import risks (such as higher-than-expected tariffs and fines due to insufficient customs clearance documentation) and hidden costs (such as storage fees and customs inspection fees due to delayed customs clearance). With DDP, however, these risks and hidden costs are entirely transferred to the sender. For example, if the sender’s declared value is too low and is fined by customs, the fine must be paid by the sender. Also, if the sender incurs storage fees after the goods arrive at the port due to failure to provide customs clearance documents in a timely manner, the sender must also bear the cost. This means that DDP not only has higher outward costs, but also carries more potential cost risks.
(Note: All fees mentioned above are for reference only. Please refer to the actual invoice for details. Thank you!)
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