LetterAgent

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Status: LetterAgent is currently in private testing ahead of public launch. Everything on this page describes the service as it works today.

Home > Guides > Who pays customs duties

Who pays customs duties, the sender or the receiver?

By default, the receiver pays. Standard international shipping terms put duties and taxes on the buyer at delivery, which is why recipients get that surprise bill at the door. The sender can take the cost on instead by shipping Delivered Duty Paid. Note up front: LetterAgent labels are Canada-only Xpresspost, so cross-border duties do not apply to them.

Why does the receiver usually pay?

Duties are levied by the destination country on goods entering it, and the person importing the goods is the receiver. The default shipping term, Delivered Duty Unpaid, means exactly what it says: the seller delivers, and the duty bill lands with the buyer. Couriers collect it at the door or hold the package until it is paid, and they add their own brokerage fee for handling the customs paperwork on top. That stacked bill is the classic surprise that turns an online bargain into an expensive lesson.

TermWho pays duties and taxesWhat the buyer experiences
Delivered Duty Unpaid (DDU)ReceiverBill at the door or package held until paid
Delivered Duty Paid (DDP)SenderNo surprise charges on arrival

Can the sender pay instead?

Yes, by shipping Delivered Duty Paid. Under DDP, the sender covers the duties, taxes, and usually the brokerage fees, so the package arrives with nothing owed. Some sellers build the cost into the product price; others calculate it at checkout. Either way, the buyer sees the full landed cost before ordering, which is why DDP has become a selling point for cross-border stores. It is not free money, though. The sender has to estimate the duty correctly, and underestimates eat into their own costs while overestimates make their prices look high.

What if the receiver refuses to pay?

They can refuse the package. A receiver who did not expect the duty bill is allowed to decline delivery, and the package is then returned to the sender or, in some cases, abandoned and destroyed. Refusal does not make the duties vanish: return shipping is usually charged to the original sender, and some carriers bill the sender for the failed delivery leg too. Sellers who ship DDU to surprise-prone buyers eat these returns regularly, which is one more reason many have switched to DDP.

Are duties the same as brokerage fees?

No, and the confusion costs people money. Duties and taxes go to the government. Brokerage fees go to the courier for preparing the customs entry, and they are charged even on low-value shipments where the duty itself is small or zero. A package with no duty owed can still arrive with a brokerage bill. When comparing the true cost of DDU versus DDP, count both: the government charges and the courier's handling fee.

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