DDP vs DAP vs EXW – Incoterms Guide for UK Trade 2026

What are Incoterms and why do they matter after Brexit?

Incoterms (International Commercial Terms) are a set of 11 international trade rules developed by the International Chamber of Commerce (ICC). The current Incoterms 2020 define who bears costs and risk at each stage of delivery – from the seller's warehouse to the buyer's address.

The chosen Incoterms are written on the commercial invoice alongside the price of the goods. This three-letter code determines:

• Who pays for transport – seller or buyer?
• Who handles customs clearance – export and import?
• Who pays duty and VAT – at the border or in the destination country?
• When does risk transfer from seller to buyer?
• Who insures the goods in transit?

Before Brexit (until 31 December 2020), trade between Poland and the UK was intra-EU – there were no customs formalities, duties or border procedures. Incoterms mainly concerned transport and risk. Since 1 January 2021, the UK has been a third country. Every shipment requires export customs clearance in the EU and import clearance in the UK (or vice versa). This makes the choice of Incoterms critical – the wrong formula can mean border delays, unexpected costs or VAT recovery problems.

EXW (Ex Works) – minimum responsibility for the seller

Definition

EXW (Ex Works) means the seller makes the goods available at their warehouse, and the buyer organises and pays for absolutely everything: loading, domestic transport, export clearance, international freight, import clearance, duty, VAT and delivery to the destination.

Who pays what under EXW?

• Seller: prepares the goods at their warehouse – and that's all.
• Buyer: loading, domestic transport, export clearance, international freight, insurance, import clearance, duty, VAT, transport to the destination address.

Advantages of EXW

• Minimum responsibility for the seller – easy to price
• Buyer has full control over logistics and transport costs

Disadvantages of EXW – serious risk in PL-UK trade

• No export clearance on the seller's side – the buyer (a foreign entity) must carry out export customs clearance in the seller's country. In practice, a UK company cannot easily do export clearance in Poland.
• VAT problems – the seller has no documents confirming that goods left the EU, making it difficult to apply the 0% VAT rate on exports. Without an MRN (Movement Reference Number), the tax authority may challenge the right to 0% VAT.
• Risk from the moment of loading – the buyer bears risk from the moment the goods are ready for collection at the warehouse. Any damage during loading is the buyer's problem.

When to use EXW?

Only in domestic trade or when the buyer has their own freight forwarder and customs agent in the seller's country. In PL-UK trade – practically never.

FCA (Free Carrier) – the better alternative to EXW

Definition

FCA (Free Carrier) means the seller delivers goods to an agreed location (e.g. a terminal or freight forwarder's warehouse) and carries out export customs clearance. From that point, risk and costs pass to the buyer.

Who pays what under FCA?

• Seller: transport to the named location, loading (if at their own premises), export customs clearance.
• Buyer: international freight, insurance, import customs clearance, duty, VAT, transport to destination.

Why is FCA better than EXW for exports to the UK?

• Seller carries out export clearance – they have the MRN and documents confirming export. They can legally apply 0% VAT.
• Buyer handles import – which is natural, as they know their UK customs procedures.
• Clear risk transfer point – once goods are handed to the carrier, risk passes to the buyer.

FCA is effectively the standard for PL→UK exports, particularly for logistics companies and freight forwarders. If you have been using EXW – consider switching to FCA.

DAP (Delivered at Place) – seller delivers, buyer clears

Definition

DAP (Delivered at Place) means the seller bears all costs and risk of transport to the agreed destination (e.g. the buyer's warehouse in the UK). The buyer is responsible only for import customs clearance, duty and VAT.

Who pays what under DAP?

• Seller: loading, domestic transport, export clearance, international freight, insurance (optional), transport to the buyer's address.
• Buyer: import customs clearance, duty, VAT, unloading.

Advantages of DAP

• Ideal for PL→UK exporters – you deliver goods "to the door", which is an attractive commercial offer.
• Clear division of customs responsibility – seller handles export, buyer handles import. Each in their own country.
• Buyer controls import costs – they know how much duty and VAT they will pay, and can reclaim import VAT.
• No VAT risk for the seller – you don't need to register for VAT in the UK.

Disadvantages of DAP

• Seller bears risk of transport delays until delivery
• If the buyer fails to complete import formalities, goods may be stuck at the border – but risk still sits with the seller
• International transport costs must be factored into the product price

When to use DAP?

DAP is the most commonly recommended formula for exports from Poland to the UK. It works particularly well when:

• You want to offer the buyer a convenient door-to-door delivery
• The buyer has their own customs agent in the UK (or uses ours – import clearance services)
• You don't want to take on responsibility for duty and VAT in the UK

DDP (Delivered Duty Paid) – seller pays everything

Definition

DDP (Delivered Duty Paid) is the formula with the greatest seller responsibility. The seller bears all costs and risk, including import customs clearance, duty and VAT in the buyer's country. The buyer receives goods "ready to use" – without any additional charges.

Who pays what under DDP?

• Seller: loading, transport, export clearance, international freight, insurance, import clearance, duty, import VAT, transport to buyer's address.
• Buyer: unloading – and that's all.

Advantages of DDP

• Maximum convenience for the buyer – ideal for clients who don't want to deal with customs formalities
• Competitive advantage – a DDP offer is more attractive than DAP, as the buyer knows the full cost upfront
• Control over the process – seller manages the entire supply chain

Disadvantages of DDP – serious risks in UK trade

• UK VAT registration required – to carry out import clearance in the UK and pay VAT, a Polish seller typically needs to be registered for VAT in the United Kingdom. This is an additional cost and obligation to file UK VAT returns.
• Difficulty reclaiming VAT – the seller pays import VAT in the UK (20%), but recovering it is complex (requires filing a UK VAT return or obtaining a refund for foreign entities).
• Full cost risk – if the duty rate turns out to be higher than expected, the seller bears the difference.
• Complications with duty and VAT payment – requires knowledge of customs procedures in the import country.

When to use DDP?

• When you have UK VAT registration (or plan to obtain it)
• For regular large-scale deliveries to the UK
• When your UK clients expect full service without customs formalities
• In B2C e-commerce – consumers should not be surprised by duty when collecting a parcel

Comparison table: EXW vs FCA vs DAP vs DDP

The table below summarises the split of costs and responsibilities between the seller (S) and buyer (B) for the four most commonly used Incoterms in PL-UK trade:

Item	EXW	FCA	DAP	DDP
Loading at warehouse	B	S	S	S
Domestic transport (to port/terminal)	B	S	S	S
Export customs clearance	B	S	S	S
International freight	B	B	S	S
Transit insurance	B	B	S*	S
Import customs clearance	B	B	B	S
Customs duty	B	B	B	S
Import VAT	B	B	B	S
Transport to buyer's address	B	B	S	S
Unloading	B	B	B	B

* Under DAP insurance is not mandatory, but the seller bears risk until delivery – so in practice they should insure the goods.

S = seller, B = buyer

Which Incoterms to choose when exporting PL→UK?

If you are exporting goods from Poland to the United Kingdom, here is our recommendation:

Recommendation 1: DAP

DAP is the most commonly used formula for PL→UK exports. It gives you control over export clearance (clean 0% VAT documentation), while leaving import clearance to the UK buyer. This is the natural split – each party handles customs formalities in their own country.

Recommendation 2: FCA

If the UK buyer wants to organise their own transport – use FCA. You deliver goods to the carrier, complete export clearance, and the buyer takes over the rest. Lower transport risk for you.

Recommendation 3: DDP (only with UK VAT registration)

DDP is a premium offering. If you have UK VAT registration and ship goods regularly – DDP can be your competitive advantage. The buyer receives goods with no surprises.

Which Incoterms to choose when importing UK→PL?

If you are importing goods from the United Kingdom to Poland, your perspective is reversed – you are the buyer.

Recommendation: DAP

DAP is most advantageous for the importer. The UK seller delivers goods to your address in Poland, and you are responsible for import customs clearance, duty and VAT. This gives you:

• Control over customs costs – you choose the customs agent and procedure
• Ability to reclaim import VAT – as an active VAT taxpayer in Poland
• Certainty that goods will arrive at your door – the seller bears transport risk

If the seller proposes EXW – negotiate at least FCA. With EXW you must organise collection from a UK warehouse, export clearance in the UK (which as a Polish entity is problematic), and the entire transport.

How Incoterms affect customs value

The chosen Incoterms directly affects the customs value of goods, on which duty and import VAT are calculated. This is a critical point many companies overlook.

How does it work?

Customs value is – in simplified terms – the price paid for goods plus the cost of transport and insurance to the EU customs border (the so-called CIF value). The customs authority converts the invoice value to customs value, taking into account the Incoterms:

• EXW – the invoice price does not include transport. The customs authority adds transport costs to the EU border to establish the customs value. You must present transport invoices.
• FCA – the price includes transport to the carrier and export clearance, but not international freight. The customs authority adds freight to the border.
• DAP – the invoice price includes transport to the buyer's address. The customs authority deducts domestic transport after crossing the EU border (because customs value = up to the border, not to the door).
• DDP – the invoice price includes everything, including duty and VAT. The customs authority must extract duty, VAT and post-border transport costs. This requires precise documentation.

Most common Incoterms mistakes in UK trade

1. EXW + no export clearance – the most common mistake. The seller chooses EXW because "it's the simplest", but doesn't carry out export clearance. Goods leave Poland without an MRN, the seller invoices at 0% VAT, and the tax authority later demands 23% VAT plus interest.
2. DDP without UK VAT registration – the seller promises DDP but has no UK VAT registration. At the border it turns out they cannot clear the goods for import. The shipment sits in port, the buyer is unhappy, storage costs mount.
3. Inconsistent Incoterms on invoice and contract – invoice says DAP London, contract says EXW Warsaw. In case of dispute – chaos. Always ensure consistency across all documents.
4. No named place with the Incoterms – the abbreviation "DAP" alone is not enough. The correct entry is e.g. "DAP 15 Baker Street, London, UK, Incoterms 2020". Without a specific address, disputes arise over where the seller's responsibility ends.
5. Confusing DAP with DDP – both terms sound similar ("delivered…"), but the difference is fundamental: under DAP the buyer pays duty and VAT, under DDP the seller does. Confusing them can mean an unexpected cost of several thousand pounds.
6. Ignoring insurance – under DAP the seller bears risk until delivery, but insurance is not mandatory. No policy when goods are damaged in transit = a loss for the seller.
7. Using old Incoterms versions – Incoterms 2020 have been in force since 1 January 2020. Older versions (2010, 2000) are still legally valid if the parties specify them, but may cause misunderstandings. Always add "Incoterms 2020".

FAQ – Frequently asked questions about Incoterms

What is the difference between DAP and DDP?

Under DAP, the seller delivers goods to the buyer's address, but the buyer is responsible for import customs clearance, duty and VAT. Under DDP, the seller takes on everything – including import clearance, duty and VAT. DAP is "delivered but not cleared", DDP is "delivered with everything included".

Can I use EXW when exporting from Poland to the UK?

Technically yes, but in practice it is very risky. Under EXW you do not carry out export clearance, you have no MRN and you may have difficulty proving export (0% VAT rate). The ICC advises against using EXW in international trade – FCA is a better alternative.

Who pays duty under DAP?

Under DAP, customs duty and import VAT are paid by the buyer. The seller bears transport costs to the buyer's address, but import customs formalities (and associated charges) remain with the buyer. More on this: Who pays duty and VAT?

Does DDP require UK VAT registration?

In most cases – yes. To carry out import customs clearance and pay VAT in the UK, a foreign entity typically needs UK VAT registration. There are customs brokers who can clear goods on behalf of a foreign entity, but this requires additional arrangements.

Which Incoterms is best for e-commerce shipping from Poland to the UK?

For B2C shipments (to consumers) we recommend DDP – the end customer should not be surprised by additional duty or VAT when collecting their parcel. For B2B shipments DAP is usually sufficient, as businesses are accustomed to customs clearance.

How does Incoterms affect the price on the invoice?

Incoterms defines what is included in the price. Under EXW the price covers goods only. Under DAP – goods plus transport to the address. Under DDP – goods plus transport plus duty plus VAT. The same consignment will have a different invoice price depending on the chosen Incoterms.

Is Incoterms a legal requirement?

No – Incoterms are ICC trade rules, not law. Their use is voluntary but universally accepted in international trade. If you do not specify Incoterms on the invoice, disputes may arise over the division of costs and risk. Customs authorities also expect Incoterms on the commercial invoice.

Can I change Incoterms after signing the contract?

Yes, provided both parties agree (by contract amendment). In practice, changing Incoterms during order fulfilment happens for example when it turns out the seller cannot clear goods for import (DDP → DAP).

Current regulatory position

Incoterms 2020 have been in force since 1 January 2020. ICC rules do not change between editions, but UK and EU customs regulations may change. The information in this article reflects the legal position as of April 2026. Always verify current requirements against official sources.

Official sources

• ICC: Incoterms 2020 — International Chamber of Commerce, 2020
• GOV.UK: International trade paperwork — the basics — HMRC, 2026
• TCA: EU-UK Trade and Cooperation Agreement — European Commission, 2026
• GOV.UK: Rules of origin — HMRC, 2026