A thread on FOB Business Forum has been passed around for years. A Chinese exporter ships an order worth under USD 3,000 to a European buyer. The commercial invoice says DDP. The buyer then gets a bill from the European forwarder for USD 600 of import duty and surcharge, payable by the consignee. The Chinese forwarder had quoted EUR 500. When the bill arrived it turned out to be GBP.
Nobody was lying about the destination. The paperwork said DDP the whole way. What failed is that a trade term is a contract, not a capability. If the seller has no lawful way to stand as importer in the destination country, the three letters do not pay the tax. The consignee does.
The VAT is paid. The question is in whose name
Import VAT is not a fee the forwarder invents. The customs authority assesses it on the importer of record — the party named on the import declaration. That same party pays it, and that same party holds the right to deduct it. One name, one set of rights.
Most China-origin DDP shipments into the EU and UK are cleared under the forwarder’s own EORI number, or a third-party broker’s. It is faster and it is legal. The goods clear, the tax is paid, the buyer receives a box at their door and never sees a customs document. What they also never see is an import VAT record in their own company name. And without that, a VAT-registered business generally has no right of deduction — the tax it paid sits in the landed cost as a permanent expense.
Put a number on it. EUR 50,000 of goods into the Netherlands at the 21% standard rate is EUR 10,500 of import VAT. If your company is named as importer, that EUR 10,500 comes back through your VAT return, usually within one to three months. If the forwarder was named instead, it does not come back at all. The gross amount is identical. The net cost is EUR 10,500 apart.
| Destination | Standard VAT rate | Import VAT on EUR 50,000 | Recoverable if you are the importer |
|---|---|---|---|
| Luxembourg | 17% | EUR 8,500 | Yes |
| Germany | 19% | EUR 9,500 | Yes |
| France | 20% | EUR 10,000 | Yes |
| Netherlands / Spain | 21% | EUR 10,500 | Yes |
| Italy | 22% | EUR 11,000 | Yes |
| Poland / Ireland | 23% | EUR 11,500 | Yes |
| Hungary | 27% | EUR 13,500 | Yes |
Rates are standard rates published by the European Commission and HMRC as of October 2026. Reduced rates apply to some product categories; check the tariff classification for your goods. Figures exclude duty.
There is a legitimate structure that fixes this. DDP does not require the seller to be the importer of record. It requires the seller to be responsible for import clearance and taxes. A forwarder can file the entry under the buyer’s EORI, as indirect representative, and still deliver on DDP terms. The buyer is then the importer, receives the import VAT document in its own name, and deducts it. That arrangement is sometimes called buyer-EORI DDP or “DDP with consignee as importer”. It costs a little more and requires the buyer’s paperwork up front, which is why the cheap all-in rate usually does not use it.
Duty and VAT are two different bills
They are assessed on the same entry, so they get treated as one number in conversation. They are not.
- Customs value is the goods value plus international freight and insurance to the EU border. Not the invoice total alone — freight is in the base.
- Duty is a percentage of that customs value, set by the TARIC classification of the goods and the origin. It can be zero, and it can be 48% on the wrong product.
- Import VAT is the destination standard rate applied to customs value plus duty. Duty is therefore taxed again. On a 12% duty line, VAT is charged on 112% of the customs value.
This is why a DDP quote that says “duty included” is not the same as “duty and VAT included”. Some forwarders quote DDP with VAT unpaid and write it as a footnote. Read the footnote.
One shipment, worked through from the invoice to the border, at a 3.7% duty rate into the Netherlands:
| Line | How it is calculated | Amount |
|---|---|---|
| Goods, FOB Shenzhen | commercial invoice | EUR 50,000 |
| Ocean freight and insurance | to the EU border | EUR 2,400 |
| Customs value | goods + freight + insurance | EUR 52,400 |
| Import duty at 3.7% | 3.7% × EUR 52,400 | EUR 1,939 |
| Import VAT at 21% | 21% × (52,400 + 1,939) | EUR 11,411 |
| Cash needed at the border | duty + VAT | EUR 13,350 |
| Recoverable if you are the importer | VAT back through your return | EUR 11,411 |
| Recoverable if the forwarder is | nothing comes back | EUR 0 |
Illustrative figures. Duty depends on the TARIC classification and origin of the goods; freight and insurance are part of the customs value, which is the part most landed-cost estimates leave out.
What changed in 2026 — and the part that does not apply to you
Four things moved this year, and most articles about them blur two completely different kinds of shipment.
- 1 July 2026: the EU removed the customs duty relief on consignments of intrinsic value up to EUR 150. In its place, a temporary flat EUR 3 duty applies, charged per tariff category present in the consignment, not per parcel and not per unit. Five t-shirts of one category is one EUR 3; t-shirts plus a watch is two.
- 1 November 2026: product identifiers (PID) become mandatory on declarations for goods sold to EU consumers by distance sale, under Regulation (EU) 2026/1022. B2B imports are exempt.
- 1 November 2026, at the latest: an EU-wide handling fee becomes operational, a fixed amount per goods category, set by delegated act, non-refundable. This is separate from the EUR 3 duty.
- Published 19 September 2026: Regulation (EU) 2026/2108, the new Union Customs Code, replacing Regulation (EU) 952/2013 and creating the EU Customs Authority in Lille. It designates the seller or platform in a distance sale as the “importer for distance sales”. It applies generally from 21 September 2027. Systematic non-compliance can carry penalties of up to 6% of the operator’s prior-year import value.
Here is the distinction that matters commercially. All four of those are distance-sale rules — B2C parcels sold to consumers, one consignment at a time, no importer on the ground. If you are a company importing an FCL or LCL container for your own business, you are not a distance sale. The EUR 3, the PID and the handling fee are not your problem. Your problem is the same one it was in 2020: EORI, classification, customs value, and whose name is on the entry.
Where the 2026 rules do reach a B2B importer is indirectly. If your supplier sells to you through a marketplace that acts as importer for distance sales, that platform — not you — becomes the importer, and you inherit the same VAT-deduction problem described above, with less visibility than before.
The UK border works differently
The UK left the EU VAT regime, so the numbers are its own. The standard VAT rate is 20%.
- Goods worth GBP 135 or less in total: the seller charges and includes VAT in the price paid. The buyer pays nothing at the door for non-excise goods.
- Goods worth more than GBP 135: the buyer pays VAT to the delivery company before delivery or on collection, and customs duty applies too — duty is charged on the goods value plus postage, packaging and insurance.
- Business imports: a VAT-registered UK importer can usually move import VAT onto its VAT return under postponed VAT accounting instead of paying at the border. That relief depends on the entry being in your name and your broker being set up for it — the same “whose EORI” question, one border over.
The GBP 135 line is also where most cross-border sellers get the DDP model wrong. Below it, DDP means the seller registers for UK VAT and charges it at checkout. Above it, DDP means the seller pays import VAT at the border — and then usually cannot recover it either, because a Chinese seller with no UK VAT registration has nothing to deduct against. That cost is real and it is inside the rate you were quoted.
So when is DDP the right buy?
DDP is genuinely the better purchase in a narrow set of situations: a first shipment, a buyer with no EU or UK entity, no EORI, no customs broker, low value, or a buyer who is not VAT-registered and therefore has nothing to reclaim anyway. In those cases the convenience is real and the VAT was never coming back.
DAP with your own EORI wins on almost everything else — recurring imports, VAT-registered buyers, high value, goods with classification risk, or anything you intend to resell. You take control of the entry, you hold the documents, you deduct the VAT, and you stop paying a forwarder to absorb a duty risk it cannot actually control. In practice the DDP rate is not cheaper; it is the DAP cost plus the forwarder’s margin for carrying the tax and the risk, plus the VAT you will not recover.
Six questions before you accept a DDP quote
- Whose EORI goes on the declaration? Ask for it in writing. This single answer decides whether the VAT is recoverable.
- Is VAT in the rate, or is it DDP with VAT unpaid? Several forwarders quote the second and describe it as the first.
- Which TARIC or commodity code will you declare, and can I see it before booking? Classification is where duty arguments start, and 2026 enforcement is less forgiving than it was.
- What value will you declare? If the answer is below what you actually paid, the tax saving is not a saving. It is a reassessment waiting to happen, with the consignee named on it.
- If customs examines or revalues the shipment, who pays? Exams, storage and demurrage are usually outside an all-in rate, and the buyer finds out at the terminal.
- Will I receive the import VAT document in my company’s name? Not a forwarder invoice showing tax. The customs import document, naming you.
If a forwarder answers all six cleanly, DDP is a reasonable buy. If they answer two and change the subject, the rate is not all-in; it is a price with a bill attached further down the line.
Questions buyers actually ask
References7 sources — primary rules and the original forum thread
- HMRC, Tax and customs for goods sent from abroad — tax and duty (GBP 135 threshold, who pays VAT, duty base): gov.uk
- HMRC, VAT rates (standard rate 20%): gov.uk/vat-rates
- European Commission, VAT rules and rates (standard rates by member state, table last checked 13 July 2026): europa.eu
- Council Directive 2006/112/EC on the common system of VAT (right of deduction, Articles 168 and 178): EUR-Lex
- Regulation (EU) 2026/2108 establishing the Union Customs Code and the EU Customs Authority, OJ L 2026/2108, 19 September 2026: EUR-Lex
- Regulation (EU) 2026/382, temporary EUR 3 duty on consignments up to EUR 150 from 1 July 2026: EUR-Lex
- FOB Business Forum, 实例告诉你，什么是DDP？什么是DDU？ (the USD 3,000 / USD 600 case): bbs.fobshanghai.com
About this page. Written and maintained by Yingdong Global Forwarding, Guangzhou Yingdong Global Forwarding Co., Ltd. We file EU and UK import entries for clients and quote both DDP and DAP on the same shipment so the difference is visible before booking. Rates, thresholds and regulation dates above were checked against the primary sources listed, October 2026. Tax treatment depends on your own registration and the entry actually filed — confirm with your adviser before you contract.