Many European importers and entrepreneurs receive the same attractive proposal from their Chinese manufacturer: “We handle everything via DDP (Delivered Duty Paid), including transport, customs, duties, and delivery to your warehouse.”
It sounds like the ultimate worry-free solution: one all-in invoice and no need to worry about logistics. In practice, however, DDP via a Chinese supplier regularly turns out to be a fiscal and administrative pitfall for commercial shipments.
When you import goods for resale, DDP carries significant risks. Discover below why FOB (Free on Board) is almost always the safer and more cost-effective route for B2B imports.
1. The missing import document (IM-A)
With a DDP delivery, the seller is responsible for customs clearance within the European Union. To cut costs, Chinese factories often outsource this transport to local consolidators who bundle goods via alternative routes in Southern or Eastern Europe.
The consequence for your administration:
- The goods are cleared under a collective account or a shady intermediary, not on your EORI number.
- You do not receive an official customs document (such as the Single Administrative Document / IM-A) in your company’s name.
- During a customs or tax audit, you cannot prove that the goods were released into free circulation in accordance with legislation.
2. Import VAT: Paid, but not deductible
In a DDP total price, the supplier passes on the import duties and VAT. However, a strict fiscal rule applies: no customs document on your VAT number means no right to VAT deduction. You effectively pay the VAT to the supplier but cannot recover it in your periodic VAT return.
When importing under FOB with your own freight forwarder:
- The declaration is linked directly to your VAT and EORI number.
- In Belgium, you can use an Article 23 license (ET 14.000), which allows you to defer the VAT at import rather than paying it upfront, accounting for it directly in your VAT return. This provides an immediate liquidity advantage.
3. Incorrect TARIC codes and liability
Under DDP, the manufacturer’s forwarder determines the commodity code (TARIC/HS code). To minimize import duties, incorrect or overly general codes are frequently used.
However, as soon as the goods are traded on the European market, you as the economic operator remain jointly and severally liable for product conformity, the correct payment of levies, and compliance with European standards. Errors by an external DDP forwarder can lead to back-taxes and fines on your plate.
4. Hidden margins on freight and handling
DDP is rarely a competitive price. Because the manufacturer bears the risk of fluctuating ocean freight rates, fuel surcharges, and customs costs, they build a generous safety margin into the unit price.
If you request an FOB quote, you separate the actual production costs from the logistics costs. You negotiate the ex-factory price and have the ocean freight quoted by your own forwarder at current market rates.
DDP vs. FOB: The Overview
| Criterion | DDP via Chinese Manufacturer | FOB via Own Forwarder |
| Import document | Often absent or in the name of third parties | Valid IM-A / Single Administrative Document on your EORI |
| VAT recovery | Risky / often not deductible | 100% deductible or directly deferrable (Art. 23) |
| Customs control | Zero influence on TARIC classification | Full control over correct commodity codes |
| Freight costs | Contains hidden risk margins | Transparent market-rate ocean freight and THC |
| Tracking & Control | Dependent on manufacturer updates | Direct tracking via your local forwarder |
Conclusion: When to choose what?
- Choose DDP exclusively for small-scale shipments, prototypes, or samples (< 100-150 kg) via express couriers such as DHL, FedEx, or UPS, provided they clear customs directly on your VAT and EORI number.
- Choose FOB for all commercial freight, from a few pallets (LCL) to full containers (FCL). You have the manufacturer load the goods at the port of departure (such as Ningbo, Shanghai, or Shenzhen) and maintain control over the ocean transport, customs clearance at the port of arrival (such as Antwerp or Rotterdam), and your fiscal administration.
Do you want to streamline your sourcing process in China or are you looking for guidance on customs classifications and quality control? Contact Eurasia Trade for independent advice.
