Who pays customs?
The short answer
Under Incoterms 2020, whether the buyer or the seller pays import duty and clears goods through customs comes down to a single choice made at the point of sale: Delivered at Place (DAP) or Delivered Duty Paid (DDP). Under DAP, the buyer is the importer and pays; under DDP, the seller takes on that role and cost. That much hasn’t changed.
What has changed, in both the EU and the UK, is what “paying” now actually involves. Since 1 July 2026 the EU charges a flat customs duty on nearly all low-value parcels that used to enter duty-free, and it does so regardless of which VAT scheme the seller uses. The UK has legislated an equivalent reform, though it is not yet in force. And in both markets, a seller who chooses DDP but has no legal presence in the destination country cannot simply pay the duty itself — it needs someone established there to act as the importer on its behalf. That is the part a generic shipping-terms explainer will not tell you.
DAP vs DDP: what the contract actually decides
Incoterms 2020, published by the International Chamber of Commerce, sets out standardised delivery terms that allocate cost, risk and responsibility between buyer and seller. Two of the eleven rules govern who handles import: Delivered at Place (DAP) and Delivered Duty Paid (DDP). Under DAP, the seller delivers the goods, cleared for export, to an agreed destination — but import clearance, duty and import VAT are the buyer’s responsibility. Under DDP, the seller goes a step further and also handles import clearance and pays all duties and taxes, delivering the goods ready for the buyer to unload.
A note on “DDU”
Many shipping guides, including carriers’ own customer-facing content, still refer to “DDU” (Delivered Duty Unpaid) as the buyer-pays alternative to DDP. DDU was an Incoterms term up to the 2000 revision; Incoterms 2010 replaced it with DAP, and Incoterms 2020 — the version currently in force — uses DAP exclusively. The practical meaning people reach for when they say “DDU” is now DAP, and contracts, customs declarations and compliance documentation should use the current term.
Contractual responsibility isn’t legal liability
Incoterms are a private contractual allocation between buyer and seller — they settle who pays whom, not who a customs authority is legally entitled to collect from. Every import into the EU or UK needs a declarant: the person who lodges the customs declaration and is legally responsible for its accuracy. Under DAP, that is normally the buyer, acting as their own importer. Under DDP, the seller wants to be the importer — but being willing to pay duty and being legally entitled to act as the importer are two different things, which is where the next section matters.
Why a non-EU (or non-UK) seller usually can’t be its own importer
Article 18 of Regulation (EU) No 952/2013 (the Union Customs Code) requires that a customs representative — the person who lodges a declaration on someone else’s behalf — be established within the EU’s customs territory. A seller with no EU registered office, central administration or permanent establishment cannot lodge its own import declaration and cannot act as a direct representative of itself. In practice, it must appoint an indirect customs representative: an EU-established customs agent or broker who lodges the declaration in their own name, becomes the declarant of record, and is jointly and severally liable with the non-EU seller for the accuracy of the declaration — classification, origin and customs value included.
The UK runs an equivalent structure. HMRC’s guidance on customs declarations states that a business not established in the UK can only be represented indirectly: the representative acts in their own name and becomes jointly liable for what is declared.
The consequence for a DDP quote: a non-EU or non-UK seller offering DDP terms is not just budgeting for a duty payment. It is committing to have an indirect representative in place — with that representative’s own exposure to the seller’s compliance record — before a single parcel can clear.
The EU since 1 July 2026: the €150 exemption is gone
Until mid-2026, consignments with an intrinsic value of €150 or less imported from outside the EU cleared customs duty-free — the EU’s long-standing de minimis threshold. That relief is gone. Under Council Regulation (EU) 2026/382 and the Commission Implementing Regulation (EU) 2026/1200, a temporary flat customs duty of €3 per item applies to low-value business-to-consumer distance sales entering the EU, effective 1 July 2026 and running until 1 July 2028, when standard tariff-based duty is due to take over, subject to the EU Customs Data Hub being operational by then.
Two details matter for a DDP/DAP decision. First, the €3 is charged to the declarant — described in the European Commission’s own guidance as “the seller or importer of the good (IOSS holder, special arrangements user, or their indirect representative)” — not to the consumer, except where a member state runs its own self-declaration system. Second, it applies regardless of which VAT mechanism is used: IOSS, the Special Arrangements scheme and standard import VAT all carry the €3 duty equally. Registering for IOSS does not opt a seller out of it. The European Commission put the scale of the change in context: an estimated 5.9 billion low-value parcels entered the EU duty-free in 2025 alone.
The UK: the £135 relief is scheduled to follow — but isn’t law yet
The UK runs a parallel exemption today: consignments valued at £135 or under, sold to UK consumers from overseas, sit outside the normal customs duty regime (Low Value Consignment Relief). In November 2025, the UK government published its plan to remove that relief and reform how low-value imports are declared, introducing a “fiscal representative” concept — a UK-based business that takes on joint and several liability for customs debts an overseas seller incurs.
This reform is legislated but not yet in force: the government has given itself until October 2028 at the latest to bring it into effect by statutory instrument, and — unlike the EU’s change — no live duty rate or commencement date has been confirmed as of this writing. Anyone advising sellers on UK DDP pricing today should treat this as a near-certain future cost, not a current one, and should check the commencement regulations on GOV.UK before quoting it as live.
EU vs UK: low-value import duty at a glance
| EU | REGNO UNITO | |
| Previous / current low-value threshold | €150 (intrinsic value) | £135 (consignment value) |
| What’s changed | Flat €3 duty per item on low-value B2C imports | Relief scheduled for removal; new “fiscal representative” liability layer |
| Legal basis | Council Reg. (EU) 2026/382; Implementing Reg. (EU) 2026/1200 | HM Treasury / HMRC policy paper, Nov 2025 (secondary legislation pending) |
| Status | In force since 1 July 2026 | Legislated, not yet in force |
| Who’s liable | Declarant: seller, importer, IOSS holder, or indirect representative | Not yet specified in detail; fiscal representative takes joint liability |
| Runs until / commences by | 1 July 2028, then standard tariffs apply | In force by October 2028 at the latest |
Who’s already on the hook today
Separately from the customs duty reform, the UK’s VAT treatment of low-value imports has been settled since 2021 and is worth distinguishing from the customs-duty question above. For direct sales — no marketplace involved — an overseas seller selling goods valued at £135 or less to a UK consumer, where the goods are outside the UK at the point of sale, must charge UK VAT at the point of sale and register for VAT in the UK. Sell the same goods through an online marketplace instead and, provided the consignment is £135 or under, contains no excise goods, and the goods are outside the UK when sold, the marketplace — not the seller — is treated as the supplier and takes on the UK VAT registration and accounting obligation. HMRC is now consulting (23 June–18 August 2026) on extending that same deemed-supplier principle to UK-based sellers trading through marketplaces, having attributed more than £8 billion in VAT collected since 2021 to the existing overseas-seller version of the rule.
The EU runs a related but not identical model through IOSS (the Import One-Stop Shop) and its own deemed-supplier rules for online marketplaces, which shift VAT accounting for low-value consignments to the platform in comparable circumstances. Neither the EU’s IOSS/marketplace rules nor the UK’s deemed-supplier rules touch the customs-duty and representation questions in Sections 4–6 — VAT liability and customs-duty/representation liability are decided separately, by different rules, and can land on different parties for the same shipment.
Choosing DAP or DDP under the new rules
For sellers into the EU, DDP now carries a firm, quantifiable extra cost — €3 per item through mid-2028 — on top of whatever standard duty applies, and it requires an indirect representative already in place if the seller has no EU establishment. That does not make DDP the wrong choice: the customer experience and reduced delivery friction it buys are real, and €3 is small next to the administrative cost EU buyers face when they are suddenly asked for duty at the door under DAP. But the decision is no longer just “do we want to absorb the cost” — it is “do we have, or need to appoint, an EU-established representative, and have we built €3-plus-duty into the landed-cost calculation.”
For sellers into the UK, DAP remains simpler while the £135 relief is still in place, since the buyer carries the duty question and, on marketplace sales, the marketplace already carries the VAT obligation. Sellers should treat the fiscal-representative reform as a planning horizon — live no later than October 2028 — rather than an immediate DDP cost, but the same non-establishment problem already applies today to anyone quoting DDP into Great Britain and needing UK customs representation.
FAQ
Is DDU still a valid Incoterm?
No. Incoterms 2020, the version currently in force, replaced DDU with DAP. Contracts and customs paperwork should use DAP.
Does using IOSS mean a seller doesn’t have to pay the EU’s new €3 duty?
No. The €3 duty applies regardless of whether the seller uses IOSS, the Special Arrangements scheme, or standard import VAT.
If a customer is charged the EU’s €3 duty, does the consumer pay it?
Generally no — it is charged to the declarant (the seller, importer, IOSS holder, or their indirect representative). Consumer self-declaration is an exception some member states may offer, not the default.
Can a non-EU business register as its own EU customs declarant to avoid appointing a representative?
No. Article 18 of the Union Customs Code requires a customs representative to be established within the EU, with narrow exceptions; a business with no EU establishment must use an indirect representative.
Has the UK’s £135 relief already been removed?
No. As of this writing it is a legislated reform without a confirmed commencement date, due to take effect by October 2028 at the latest.
