# Incoterms/delivery terms

Source: https://developer.avalara.com/products/crossborder/integration-guides/avatax-for-cdit/jqc1241943768908/

Guide: AvaTax Cross-Border (Customs Duty and Import Tax)

# Incoterms/delivery terms

Understand the rules for customs duties, taxes, shipping, and insurance in cross-border purchases.

International Commercial Terms (also known as Incoterms or delivery terms) are rules defining who pays customs duties and taxes (also shipping and insurance) for a cross-border purchase​. Incoterms are generally determined by the seller, especially in transactions. AvaTax supports the following delivery terms:

-   CFR: Cost and Freight
-   CIF: Cost, Insurance, and Freight
-   CIP: Carrier and Insurance Paid to
-   CPT: Carriage Paid To
-   DAP: Delivered at Place
-   DDP: Delivered Duty Paid
-   DPU: Delivered at Place Unloaded
-   EXW: Ex Works
-   FAS: Free Alongside Ship
-   FCA: Free Carrier
-   FOB: Free on Board

For CDIT, most transactions will use DDP (Delivery customs duty Paid) and DAP (Delivered at Place).

## DDP

DDP delivery terms match customer expectations for online retail. The DDP user experience is similar to buying domestically.

-   The seller pays the customs duties and taxes.
-   Customs duties and taxes are paid during online checkout.
-   This results in a better user experience.

![ddp-incoterms](https://knowledge-be.avalara.com/bundle/ibd7650974543863_ibd7650974543863/page/qun1224800613761.image?_LANG=enus)

## DAP

DAP delivery terms can result in a poor user experience and more pain for E-Retailers:

-   The buyer pays customs duties and taxes.
-   Customs duties and taxes are paid at delivery when collected by the shipper.
-   This scenario is easiest for the seller.

![dap-incoterms](https://knowledge-be.avalara.com/bundle/ibd7650974543863_ibd7650974543863/page/iep5091559381176.image?_LANG=enus)