A customer in Chicago orders a sweater from your Toronto store. A week later, the courier asks for a duty and brokerage payment before handing it over. Some customers pay. Some refuse the parcel, and the return lands back on you.
DDP (Delivered Duty Paid) is how brands avoid that moment. Under DDP, the seller pays duties, taxes, and customs fees before the parcel arrives, so the customer pays nothing at the door.
In 2026, the choice carries more weight. The US has suspended its de minimis exemption, so parcels crossing into the US no longer enter duty-free by default, and DDP also determines who carries the legal responsibility for what’s declared at the border. DDP makes landed cost predictable; clearance speed still depends on the paperwork.
This guide covers what DDP means, how it compares with DAP and DDU, how it works on an ecommerce order, who’s responsible, what’s different for Canada-US brands this year, what it costs, and how to choose.
What Is DDP Shipping? A Guide for Canada-US Brands in 2026
DDP (Delivered Duty Paid) is a shipping arrangement where the seller delivers goods to the buyer’s door cleared for import, with duties, import taxes, and customs fees already paid. The buyer pays the price at checkout and nothing more on delivery.
DDP is one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce, the standard terms buyers and sellers use to split cost and risk in international trade. It puts more responsibility on the seller than any other rule, and it applies to any mode of transport, from ocean freight to a courier van.
In ecommerce, the term is often used more loosely. When a carrier, postal service, or checkout app offers “DDP,” it usually means a billing option: duties and taxes are charged to the shipper’s account instead of being collected from the customer. The customer’s experience is the same, even though no sales contract names the Incoterm.
You’ll also see “free domicile” used as a synonym. Amazon, for example, requires inbound FBA shipments to use DDP terms and notes they’re sometimes called free domicile. Free domicile isn’t an Incoterm, though, so if a supplier or partner uses it, confirm in writing whether import taxes are included along with duties.
DDP vs. DAP vs. DDU: who pays duties, and when?
Under DDP, DAP, and DDU, the seller arranges and pays for shipping to the buyer. The difference is who clears customs and pays the duties and taxes: the seller under DDP, and the buyer under DAP and DDU.
DDP | DAP | DDU | |
|---|---|---|---|
Seller pays shipping | Yes | Yes | Yes |
Import clearance | Seller (or its broker or carrier) | Buyer | Buyer |
Duties and taxes paid by | Seller | Buyer | Buyer |
Customer sees at checkout | Full landed price | Product and shipping only | Product and shipping only |
At the door | Nothing owed | Duty, tax, and often a brokerage fee before release | Same as DAP |
Status | Incoterms 2020 rule | Incoterms 2020 rule | Retired in 2010 |
DDU (Delivered Duty Unpaid) was dropped from the Incoterms rules in the 2010 revision and replaced by DAP (Delivered at Place). The arrangement stayed the same: the seller delivers, and the buyer handles import duties and taxes. Many carriers, checkout apps, and older contracts still use “DDU,” so if your carrier offers a DDU option, treat it as DAP under its old name.
People also ask how DDP compares with EXW (Ex Works). EXW sits at the opposite end of the Incoterms range: the seller makes the goods available at its own facility, and the buyer arranges everything after that, including export clearance, freight, and import. It shows up in wholesale and manufacturer pricing and rarely fits direct-to-consumer orders.
How does DDP work on an ecommerce order?
On a DDP order, duties and taxes are calculated at checkout from each product’s HS code, declared value, and country of origin, then paid by the seller’s carrier or customs broker when the parcel crosses the border.
- Checkout shows the landed price. A duty and tax calculator, built into the platform, the carrier, or a checkout app, adds duties and taxes to the order total for that destination.
- Product data travels with the order. The HS code, declared value, and country of origin for each item go onto the shipping label and commercial invoice.
- The carrier or broker files the entry. It submits the shipment to customs and pays the duties and taxes, then bills them back to the seller.
- The parcel is delivered with nothing owed.
The duty is only as accurate as the product data behind it. A wrong HS code or an outdated country of origin produces a wrong landed price at checkout, or a shipment held at the border while someone corrects it. Holds can stretch clearance from a day into weeks, which is why customs clearance timing depends far more on documentation than on the shipping terms.
For brands that use a 3PL, the 3PL’s job in this flow is to pass that product data from the brand’s ecommerce platform to the carrier accurately and to flag gaps before an order ships. GoBolt offers postage DDP options for cross-border orders and passes product data from a brand’s platform through to the carrier.
Who is the importer of record on a DDP shipment?
On a DDP shipment, the importer of record is usually the seller or an agent acting on the seller’s behalf. The importer of record is legally responsible for the classification, value, and country of origin declared to customs, so choosing DDP also means accepting that responsibility.
The importer of record is the party named on the customs entry. It’s responsible for making sure the goods meet import requirements, paying the duties owed, and keeping records. In the US, the importer of record must use “reasonable care” when classifying, valuing, and declaring the origin of what it imports, even when a licensed customs broker or courier files the paperwork. The broker submits the entry; the legal responsibility stays with the importer of record.
For a Canadian brand shipping direct to US customers, that’s often the brand itself. The Government of Canada’s Trade Commissioner Service notes that CBP often treats the Canadian exporter as the importer of record, using a CBP-assigned importer number that a courier or broker can request on the brand’s behalf. Under DAP, the customer typically takes on that role for their own order. Under DDP, it moves to you.
That role is getting more scrutiny. Executive Order 14411, signed June 3, 2026, directs CBP to tighten the rules for importers of record based outside the US. The changes it calls for include stronger bonding, more disclosure, and a bar on foreign importers of record using informal entry, the simpler process most low-value parcels clear through. As of late October 2026, the rule putting those changes into effect is under White House review and hasn’t been published, though CBP has already begun voiding importer numbers registered with inaccurate or incomplete information. If your US sales depend on your brand acting as importer of record, the final rule is worth watching closely.
Is DDP shipping illegal? No. DDP is a standard Incoterms rule that large retailers and marketplaces use every day. What draws enforcement is DDP offers built on undervalued invoices, or on thinly capitalized “importers” set up to absorb the liability and disappear. CBP has named undervaluation and opaque importer structures as enforcement priorities, and the liability lands on whoever is named as importer of record, whatever the sales contract says. A DDP quote that costs less than the duty alone would is the warning sign.
This is general information, not legal advice. A licensed customs broker can confirm who should act as importer of record for your setup and what that requires.
What does DDP mean for Canada-US brands in 2026?
DDP decides who pays the duty and when. The amount owed still depends on the product’s HS code, its country of origin, and which way the parcel is crossing, and in 2026 the rules for Canada-to-US and US-to-Canada parcels look very different.
Shipping from Canada to the US
The US de minimis exemption, which let parcels valued under USD 800 enter duty-free, has been suspended for all countries since August 29, 2025, and is set to end by statute on July 1, 2027 (see Section 321: Suspended). Every US-bound parcel now goes through customs entry, and duty applies unless the goods qualify for a preference.
For Canadian brands, that preference is usually CUSMA. Goods that meet CUSMA rules of origin can still enter the US duty-free, and they’re exempt from the separate Section 301 tariff on Canadian goods. Two exceptions matter:
- Section 338 goods. A 50% additional duty applies to listed Canadian products whether or not they qualify under CUSMA. The list is defined by HTS code and changed again on October 30, 2026, when 100 product lines were added, including certain carpets, shampoos, and paints, and 22 were removed.
- Goods that don’t qualify as CUSMA-originating, such as products made overseas and shipped from a Canadian warehouse, pay the regular duty rate plus any tariffs tied to their country of origin.
Our HTS code guide covers how classification drives both. For the wider picture on serving US customers from Canada, see order fulfillment and shipping from Canada.
Under DAP, all of this reaches the customer as a bill at the door on every order, which is why the choice of terms matters more on this lane than it did a year ago.
Shipping from the US to Canada
Canada still applies low-value thresholds to parcels shipped from the US by courier, under CUSMA rules set by the CBSA:
- Up to CAD 40: no duty or tax.
- CAD 40.01 to CAD 150: no duty, but GST/HST and any provincial sales tax apply.
- Over CAD 150: duty (unless the goods qualify under CUSMA) and taxes apply.
Those thresholds depend on where the parcel ships from and how it ships. Parcels sent by postal service, and courier parcels from countries other than the US or Mexico, use a CAD 20 threshold instead. Under DDP, the taxes become part of your checkout price; under DAP, the courier collects them from the customer at delivery.
Does DDP include tariffs? Yes. Tariffs are duties, so under DDP the seller pays them as part of the landed cost. DDP changes who pays the tariff and when, and leaves the rate itself unchanged.
All figures here are as of October 2026 and change often. Check the current rules with CBP and the CBSA before pricing a lane.
How much does DDP shipping cost?
A DDP price is the product price plus shipping, duties, import taxes, and any brokerage or carrier DDP fee. The cost per order depends on the product, where it was made, and the lane it ships on.
To calculate a landed price:
- Start with the customs value of the order.
- Add duty: the rate for the product’s HS code and origin, multiplied by the customs value.
- Add import taxes. Canada charges GST/HST and provincial tax on imports; the US has no federal sales tax at the border.
- Add brokerage or carrier DDP fees, plus the US Merchandise Processing Fee where it applies.
- Add shipping.
Here’s a hypothetical US brand shipping to a customer in Ontario by courier, using Ontario’s 13% HST and an illustrative 10% duty rate (rates as of October 2026; your product’s actual duty rate depends on its classification and origin):
- A CAD 120 order: duty-free under the CAD 150 threshold. HST of CAD 15.60 applies.
- A CAD 200 order of goods made outside North America: CAD 20 in duty, then CAD 28.60 in HST on the duty-inclusive value, for CAD 48.60 owed.
- The same CAD 200 order of goods that qualify under CUSMA: no duty, and CAD 26 in HST.
Under DDP, those amounts are priced into checkout. Under DAP, the customer pays them on the doorstep, often with a brokerage fee on top.
Should your brand ship DDP or DAP?
DDP is the better fit for brands selling direct to consumers, who expect one price at checkout and nothing to pay at the door. DAP still fits B2B buyers who have their own customs broker and prefer to clear goods themselves.
Why brands choose DDP:
- A predictable landed cost, shown to the customer at checkout.
- Fewer refused parcels, since no one is asked to pay on delivery.
- Fewer support tickets about surprise fees.
The trade-offs:
- Duty and tax come out of your margin, or go into your price.
- You, or an agent acting for you, take on the importer-of-record responsibility covered above.
DAP still makes sense for wholesale and B2B orders where the buyer clears its own goods, and for contracts where the buyer wants control of the import. For low-value courier orders from the US to Canada under CAD 40, there’s nothing to collect under either option.
DDP buys predictability. Clearance speed comes from accurate documentation, whichever terms you use.
Final thoughts
DDP decides who pays and who’s responsible at the border; the product’s classification and origin decide how much is owed. In 2026, with US de minimis suspended and different rules in each direction, the importer-of-record question and clean product data matter more than the name on the shipping option.
Before you switch terms on a cross-border lane, answer three questions:
- Who is named as importer of record on your entries?
- Is the HS code and country of origin current for every SKU you ship across the border?
- Is the duty for that lane priced into checkout?
For the next layer, including fulfillment options after the tariff changes, read A Retailer’s Guide to Cross-Border Shipping After the Tariff Changes.
FAQs
Is free domicile the same as DDP?
Usually, yes. "Free domicile" is commonly used to mean the seller delivers to the buyer's door with duties paid, and Amazon treats the two terms as interchangeable for inbound FBA shipments. Free domicile isn't an official Incoterm, though, so confirm in writing whether import taxes are included along with duties.
What is the difference between DDP and DDU?
Under DDP, the seller pays import duties and taxes before delivery, so the buyer owes nothing at the door. Under DDU (Delivered Duty Unpaid), the buyer pays them on arrival. DDU was retired from the Incoterms rules in 2010 and replaced by DAP, which works the same way.
Who is the importer of record on a DDP shipment?
Usually the seller, or an agent acting for the seller. The importer of record is legally responsible for the classification, value, and origin declared to customs. For Canadian brands shipping direct to US customers, CBP often treats the brand itself as the importer of record.
Is DDP shipping illegal?
No. DDP is a standard Incoterms rule used by major retailers and marketplaces. What's illegal is undervaluing goods or using shell importers to avoid duty, which some unusually cheap "DDP" offers rely on. The importer of record carries the liability for an inaccurate entry, so check who that is before you sign.
Does DDP include tariffs?
Yes. Tariffs are duties, so under DDP the seller pays them as part of the landed cost. DDP changes who pays and when, and leaves the tariff rate the same. The rate depends on the product's HS code, country of origin, and any trade agreement it qualifies for.
