EXW places very limited delivery obligations on the seller, while DDP places the widest delivery and customs burden on the seller. That contrast makes both rules look simple, but cross-border transactions often expose practical problems hidden behind the headline allocation.
Understand the delivery obligation
Under EXW, the seller makes the goods available to the buyer at the named place, usually the seller's premises. The seller is not required to load the collecting vehicle or clear the goods for export, although the parties can agree additional assistance outside the rule.
Under DDP, the seller arranges carriage and delivers the goods at the named destination, cleared for import and ready for unloading. Risk remains with the seller until delivery there; the buyer normally handles the physical unloading from the arriving vehicle.
Test whether customs responsibilities are legally possible
EXW can be problematic when the foreign buyer cannot act as exporter or complete export formalities in the seller's country. FCA may be more workable because the seller completes export clearance and delivery can still occur at or near the seller's premises.
DDP can be problematic when a foreign seller cannot act as importer of record, obtain local registrations, recover import VAT or appoint the necessary customs representative. If the seller can deliver to destination but the buyer should clear the goods for import, DAP may better reflect reality.
Build the price from the actual cost allocation
An EXW price generally covers the goods and suitable packaging, while the buyer budgets pickup, export clearance, main transport, insurance, import duties, taxes and destination charges. A DDP price must absorb almost the entire journey, including export and import formalities and applicable duties or taxes.
Do not quote DDP using freight alone. Obtain a defensible HS classification, customs value basis, duty rate, tax treatment, brokerage and destination-charge estimate before committing to an all-inclusive price.
Name the place and document exceptions
State the precise address or destination point and the version—for example, “EXW Seller Warehouse, full address, Incoterms® 2020” or “DDP Buyer Warehouse, full address, Incoterms® 2020”. Clarify loading, unloading, fiscal representation and non-recoverable taxes separately where the sales contract needs more detail.
Quick control
Mini-checklist
- Confirm the exact delivery point and unloading responsibility
- Verify who can legally perform export and import clearance
- Identify importer-of-record and VAT-registration requirements
- Calculate duties, taxes, brokerage and destination charges
- Consider FCA instead of EXW or DAP instead of DDP where appropriate
Frequently asked questions
What professionals ask
What is the main difference between EXW and DDP?
EXW gives the seller the minimum delivery obligation, with the buyer taking most transport and customs responsibilities. DDP gives the seller the maximum obligation, including carriage and import clearance to the named destination.
Does the seller load the truck under EXW?
Not under the standard EXW allocation. The seller makes the goods available at the named place, while loading is normally the buyer's responsibility. Any different arrangement should be agreed clearly.
Does DDP include import VAT?
DDP places import-clearance costs and applicable import duties or taxes on the seller, but the legal and accounting treatment of import VAT varies. The seller must verify registration, importer-of-record and recovery rules before quoting.
Authoritative references
Further reading
This guide provides general operational information and does not constitute legal, customs, tax or regulatory advice. Requirements vary by transaction and jurisdiction; obtain specialist advice where appropriate.