DDP Imports: Why Transport Charges Billed to the Importer Are Not Added to Dutiable Value Released

We understand your concern regarding why the customs broker did not request the transport invoice billed to the importer for a DDP (Delivered Duty Paid) shipment. This procedure aligns with the core principles of customs valuation and the specific characteristics of the DDP term. Below is a detailed explanation of why these charges are excluded from the dutiable value.

Understanding the DDP Condition

First, it is essential to understand the essence of DDP. Under Incoterms 2020, DDP places the maximum obligation on the seller. The seller is responsible for transporting the goods to the designated destination (e.g., the importer's premises), completing import clearance, paying all duties, taxes, and other charges, and bearing all transportation risks. In principle, the importer should receive the cleared goods without incurring additional costs or handling clearance procedures.

Nature of Charges Billed to the Importer

Despite the DDP terms, if an importer receives an invoice for transport charges, it typically pertains to inland transport or logistic services occurring after the goods have arrived at the first port or airport of the importing country. While the exporter generally bears all costs, direct billing to the importer may occur due to:

• Specific requests made by the importer for inland haulage.
• Unexpected costs such as wharfage, storage fees, or specialized equipment usage.
• Services extending beyond the original scope of the contract.

Principles of Customs Valuation

The principle for determining the Customs Value differs from the commercial payment terms. Adhering to the WTO Customs Valuation Agreement (GATT Article 7), the dutiable value is generally based on the price including freight and insurance up to the import port (CIF basis). Fundamentally, only costs incurred up to the point of arrival at the import port or airport are included in the customs value.

Exclusion of Post-Arrival Transport Costs

Consequently, if the transport invoice billed to the importer under DDP terms represents costs incurred after the goods have arrived at the port/airport (i.e., domestic inland freight), these amounts are not added to the dutiable value. According to customs regulations, costs related to transport, insurance, and other charges incurred after arrival at the import port are considered deductible items.

Why the Invoice Was Not Requested

For this reason, your customs broker did not require the invoice for domestic transport charges. Since this cost is excluded from the dutiable value subject to customs duties, it is not a document required for customs declaration. Customs brokers only request documentation that affects the calculation of the dutiable value to ensure accurate assessment of duties and VAT.

In summary, while DDP requires the seller to bear costs, if the importer pays for inland transport within the importing country, that cost is not part of the customs value. Therefore, submitting that specific invoice to the customs office is unnecessary.