GlossaryEN1 min readUpdated: Jun 13, 2026

DDP tax audit risk

Under DDP, the seller is fully responsible for import duties and taxes.

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Last updated: 13 June 2026Published: 27 January 2026

Source: https://iccwbo.org/resources-for-business/incoterms-rules/

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Incoterms 2020 Simulator: Who bears costs & risk?

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Definition & Explanation

Under DDP, the seller is fully responsible for import duties and taxes. DDP tax audit risk describes the financial exposure the seller faces if customs or tax authorities subsequently audit the shipment and find underpayments, incorrect classifications, or valuation errors. This can result in back payments, penalties, and interest charges. The seller must maintain rigorous customs compliance, accurate documentation, and proper valuation methods to mitigate this ongoing exposure throughout the contract period.

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Calculate customs valueWork out import duties and customs valueOpen Find HS codeDetermine the tariff number for customsOpen Compare IncotermsClarify duties, cost and riskOpen

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DDP tax audit risk

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Related Terms

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Freight Audit Cold Chain Risk Analytics

Environmental Risk Audit for Freight Transport

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