Selling to the US: who pays import duties and customs charges?

Use a precise rule in your documents

The International Chamber of Commerce checklist distinguishes DDP, which includes the seller’s import obligations, from DAP, which leaves those obligations to the buyer. The seller should confirm that they can actually complete the required formalities before offering DDP.

You may still encounter “DDU” in interfaces or business discussions. Do not rely on the label alone: clarify who clears customs, who pays the charges and which contractual rule applies. A carrier’s technical label does not replace a clear allocation of responsibilities.

Record the chosen rule, its version and the agreed place, for example “DAP [destination address], Incoterms 2020.” Also specify who will appear as the importer on the declaration. The payer named on a carrier account and the importer are different roles.

Separate duties, taxes, brokerage and transport

In everyday language, “customs fees” often groups together several different charges. Duties depend on factors including the product, its origin and the applicable treatment. Brokerage fees pay an intermediary for completing formalities. Disbursement fees may relate to amounts advanced on your behalf. Transport is another separate cost.

An offer with brokerage included does not therefore mean that all duties are included. Purolator’s shipping FAQ states that its shipping rates exclude customs duties, brokerage and customs clearance fees. Always check the exact scope of your service and agreement.

Sales taxes and collection obligations also need separate consideration. Choosing DDP or DAP does not, by itself, resolve every tax issue involved in selling online in the US.

Do not infer the duty rate from the shipping address alone

Shipping from Canada does not prove Canadian origin. CUSMA includes eligibility conditions and rules of origin; the Government of Canada guidance explains this principle. Prepare the supporting evidence with your suppliers and have your broker validate the treatment.

The order value alone is not enough, either. CBP announced the suspension of the de minimis exemption from August 29, 2025. Do not automatically apply the old US$800 rule to your cost model. Check the provisions in force for the product, origin, date and route of entry involved.

For the same reason, avoid using a single duty percentage for your entire store if you sell multiple product categories. A customs record for each SKU helps manage differences in classification, origin and documentation.

Compare DDP and DAP from a margin perspective

Under DDP, include import charges in your profitability calculation, whether you absorb them or transparently pass them on in your offer. Under DAP, the amount requested from the recipient can affect their experience even if it does not appear on your initial shipping invoice.

Illustrative example in Canadian dollars: after product, preparation and shipping costs, an order leaves a $28 contribution before cross-border charges. If another $9 remains payable by your business in the scenario being assessed, that contribution falls to $19. If the customer is asked to pay the $9, also monitor refusals, returns and customer service requests. This amount is a calculation assumption, not a customs rate.

Price both scenarios using the same products and destinations. A decision based only on the apparent margin at checkout may overlook part of the cost of serving the customer after the sale.

Checks to complete before launching sales

• Product customs record: verified description, value, origin and classification.
• Responsibilities: chosen rule, agreed place, importer and payer identified.
• Checkout: visible information before payment explaining what is included and what may remain payable.
• Configuration: consistency between the store, commercial invoice and carrier instructions.
• Exceptions: a procedure for declaration corrections, recipient refusals and unexpected charges.
• Test order: check the delivery and every invoice received after shipment.

If you are considering US inventory, distinguish the importation of stock from the domestic sales that follow. Our Canada–US shipping guide compares this scenario with sending parcels from Québec. The scope of transport and logistics coordination services should be agreed with your chosen broker.