How to manage import taxes for international shipping (DDP vs. DDU)

If you are shipping goods internationally and have not opted into Kickstarter’s automatic tax collection for EU imports above the high threshold value, you are responsible for how your backers encounter import VAT and customs duties. You must choose one of the following "Incoterms" (shipping terms) and communicate it clearly to your backers.
 

Option 1: DDP (Delivered Duty Paid) – "Seamless Delivery"

In this scenario, you pay the import VAT and duties on behalf of your backers. This is the best experience for the backer, as they receive their reward without any extra bills at the door.

• How to do it:
  1. Carrier Setup: Log into your shipping account (e.g., DHL, FedEx, UPS) and explicitly select "Bill Duties & Taxes to Sender" (DDP) when booking the shipment.
  2. Account Requirement: You must have a carrier account configured to pay duties; otherwise, the courier will revert to billing the backer.
  3. Commercial Invoice: You must include the following "Tax Paid" declaration on your Commercial Invoice (in the 'Notes' or 'Description' field):
     
     --- CUSTOMS DECLARATION (DDP - DUTIES PRE-PAID) ---
     VAT STATUS: VAT PRE-PAID BY SENDER.
     DUTY STATUS: IMPORT DUTIES PRE-PAID BY SENDER.
     INCOTERMS: DDP (Delivered Duty Paid).
     CARRIER INSTRUCTIONS: The sender has pre-paid all import VAT, customs duties, and brokerage fees.
     PLEASE BILL ALL IMPORT CHARGES TO SENDER ACCOUNT: [INSERT CARRIER ACCOUNT NUMBER].
     DO NOT collect payments from the recipient. If held, contact: [INSERT CREATOR SUPPORT EMAIL].
      

Option 2: DDU / DAP (Delivered Duty Unpaid) – "Pay at Arrival"

In this scenario, the backer pays the import VAT and duties upon arrival. This can lead to surprise fees, so transparency is vital to avoid package refusals.

• How to do it:
  1. Transparency: You must state on your campaign page:
     "International orders are shipped DDU (Delivered Duty Unpaid). You will be responsible for all local import taxes, duties, and carrier brokerage fees upon delivery."
  2. Data Requirements: You must provide the backer's phone number and email to the courier. If the courier cannot reach the backer for payment, the package will be returned to you at your expense.
  3. Commercial Invoice: You must include the following declaration:
     
     --- CUSTOMS DECLARATION (DDU/DAP) ---
     VAT STATUS: IMPORT VAT/DUTY NOT COLLECTED AT POINT OF SALE.
     DUTY TERMS: DDU (Delivered Duty Unpaid) / DAP (Delivered at Place).
     CARRIER INSTRUCTIONS: This shipment is DDU. Please contact the recipient directly to collect all applicable import VAT, customs duties, and brokerage fees prior to delivery. Do not bill the sender for import charges.
     RECIPIENT CONTACT: [INSERT BACKER PHONE NUMBER & EMAIL - MANDATORY]
      

Critical Best Practices for Both Methods

• Use Accurate HS Codes: Incorrect codes cause customs to manually re-assess your goods, ignoring your pre-paid status.
• Digital Data Entry: Do not rely on paper notes alone. Ensure that when you book your shipment in your carrier's portal, you select the correct duty payment setting (DDP vs. DDU). Most carriers now use digital customs data, which overrides paper invoices.
• Match Transaction Values: The value on your Commercial Invoice must exactly match the amount the backer paid. If there is a discrepancy, customs will trigger a manual review and will often ignore your "pre-paid" status to avoid tax evasion.

Related articles:
How to enter item values for bundles and reward packages