If you sell on Amazon Canada and your supplier or freight forwarder has offered to ship “DDP” at what looks like a meaningfully better price than running your own clean import, this guide is for you. The freight forwarder is not lying when they say the per-unit landed cost is lower. What they are not telling you is where most of the saving comes from, who carries the risk when CBSA reassesses the entry, and how much money you are leaving on the table on the input tax credit side once you register for GST/HST.
This is the conversation we have with non-resident Amazon FBA Canada clients who walk in already on DDP and want to know whether to stay on it. The honest answer is “it depends on whether your DDP quote is built on legitimate efficiency or on under-declaration,” and the only way to know is to look at the math.
The short answer
DDP can be legitimate (forwarder uses scale efficiency on freight and bonding), but when a DDP quote is meaningfully cheaper than a clean import, most of the gap is usually built from under-declared commercial invoice values, aggressive HS classifications, and country-of-origin manipulation. CBSA can reassess those entries for up to four years, and as the owner of the goods and the seller of record in Canada you are squarely in scope, not the China-based forwarder. Separately, under DDP the import GST is billed to the forwarder’s CARM account, so you cannot recover it as an input tax credit even if everything was declared honestly. For any Amazon FBA Canada seller who is GST/HST registered (or planning to register), running your own clean import as the importer of record almost always wins on a 12-month basis once you account for the recovered GST and the absence of audit exposure.
What DDP actually is
DDP stands for Delivered Duty Paid and is one of the eleven Incoterms 2020 trade terms published by the International Chamber of Commerce. Under DDP, the seller (your overseas supplier or, more commonly, the freight forwarder acting on their behalf) takes responsibility for the goods all the way to the named destination in Canada, including:
- Export clearance from the country of origin
- International freight
- Insurance
- Canadian customs entry filing
- Duty and import GST payment to CBSA
- Domestic delivery to your Amazon fulfillment centre or your 3PL
You receive a single per-unit landed price. You do not interact with CBSA, with the broker, or with the freight carrier. The forwarder handles everything and invoices you for one number.
Compare this to the other common Incoterms used in Amazon FBA imports:
| Incoterm | Who handles export? | Who handles freight? | Who handles Canadian import + duty + GST? | Who is the Canadian IOR? |
|---|---|---|---|---|
| EXW (Ex Works) | You | You | You | You |
| FCA (Free Carrier) | Seller | You | You | You |
| FOB (Free on Board) | Seller | You | You | You |
| CIF (Cost, Insurance, Freight) | Seller | Seller (to port) | You | You |
| DAP (Delivered at Place) | Seller | Seller | You | You |
| DDP (Delivered Duty Paid) | Seller | Seller | Seller / forwarder | Seller / forwarder |
The critical column is the last one: who is the importer of record in Canada. For every Incoterm except DDP, that is you. Under DDP, the forwarder is named on the CBSA entry. That is the technical difference that drives almost every tax and audit consequence in this article.
Why DDP quotes look cheaper: the two sources
When a forwarder offers DDP at a price that beats your own clean import math, the gap comes from a mix of two things. The mix matters because one is sustainable and the other is a deferred liability.
Source 1: Legitimate scale efficiency
Forwarders aggregate many sellers’ goods into shared containers, share CBSA-posted financial security across all their clients, and have pre-negotiated bulk rates with brokers. Real cost savings, real economies of scale. As a rough order of magnitude, this can shave 10 to 20% off a clean import all-in cost for low-volume sellers who cannot independently access the same rates.
If a DDP quote is 10 to 20% below your own quote, this is probably where the gap is coming from, and the comparison becomes a genuine business choice (with the ITC and audit angles below still applying).
Source 2: Under-declaration and classification arbitrage
When the DDP price is meaningfully below clean-import economics (30%, 40%, sometimes more), the difference is almost always being made up by practices that do not survive a CBSA audit:
- Under-declared commercial invoice value. $40,000 of goods declared at $8,000 or $12,000. Duty is calculated on the declared value. GST is calculated on the declared value plus duty. CBSA collects on the declared value, not the real value.
- Aggressive HS classification. Picking a 0% duty code when the product likely belongs in a 6.5% bucket (or higher when anti-dumping duties apply). The forwarder bets CBSA’s sampling does not catch this shipment.
- Country-of-origin manipulation. Routing Chinese-origin goods through Vietnam, Malaysia, or another transit country to claim non-Chinese origin and dodge anti-dumping duties or other origin-based tariffs.
- De minimis abuse. Splitting a commercial container into many small parcels through the postal stream or courier consignments to avoid formal commercial entry and the duty that comes with it.
- Postal channel routing. Declaring goods as personal gifts or samples through Canada Post to skip commercial duty entirely.
The forwarder pockets the difference between what they collect from you (real cost embedded in the DDP price) and what they pay CBSA (declared cost) as margin. That margin is what makes the quote competitive on day one.
Who pays when CBSA catches it
When CBSA reassesses an entry as under-declared, the Statement of Adjustment names the importer of record (the forwarder). CBSA also has authority to pursue the owner of the goods for unpaid duty and GST, especially where the owner benefited from the under-declaration. A China-based forwarder is operationally beyond CBSA’s collection reach. The Canadian-resident or non-resident Amazon FBA seller they were shipping for is not.
The CBSA process when an entry gets flagged:
- Verification or audit notice. CBSA sends a request for documents on a specific entry or a series of entries. They ask for the commercial invoice, packing list, supplier invoices in the original currency, payment records, freight contracts, and any HS classification or origin certification.
- Reassessment. If CBSA finds the declared value was lower than the actual transaction value, or the HS code was wrong, they reassess. They issue a Statement of Adjustment showing the additional duty and GST owed.
- Administrative Monetary Penalties (AMPS). CBSA layers penalties on top of the duty and GST. Penalty levels range from a few hundred dollars per contravention at the entry level up to thousands per contravention for repeated or material misdeclarations. Penalties stack across entries within the audit period.
- Interest. Compound interest from the original entry date at the prescribed rate. On four years of under-declared shipments, the interest alone is meaningful.
- Collection. CBSA pursues the IOR first. When the IOR is uncollectable (offshore forwarder), CBSA looks to the next reachable party, which is typically the owner of the goods at the time of importation.
None of this shows up while everything is going smoothly. CBSA verification cycles can run two to four years after the entries. Sellers who have been on DDP for three years and never had a problem are not in the clear; they have just not been audited yet.
The ITC angle: why even clean DDP costs you money
Set aside the under-declaration question entirely. Assume your forwarder is doing everything legitimately and accurately. DDP still costs you the recoverable import GST on every shipment.
Here is why: input tax credits follow the importer of record on the CBSA entry. Under DDP, the IOR is the forwarder. The import GST on the entry is billed to their CARM account. They pay it to CBSA, then bake it into the per-unit price they charge you. You never see the GST charge separately, you have no GST documentation in your name, and CRA will not let you claim it as an ITC on your own GST/HST return.
For a registered Amazon FBA Canada seller, that recovery is the largest single line item in their ITC calculation alongside Amazon fees. Losing it on every shipment, every year, adds up quickly.
Worked example: 12-month landed-cost comparison
Non-resident Amazon FBA seller, $400k of imports over 12 months
You import roughly $400,000 CAD of goods from China to Amazon FBA Canada over a year. The HS classification carries a 6.5% duty rate (typical for consumer goods). Real-world freight, duty, and GST math:
| Cost item | DDP (cheap quote, partly under-declared) | Clean own-IOR import |
|---|---|---|
| Goods (real value) | $400,000 | $400,000 |
| Freight (your share) | included in DDP | $22,000 |
| Declared value to CBSA | $160,000 (40% of real) | $400,000 (full) |
| Duty at 6.5% on declared value | $10,400 | $26,000 |
| Import GST at 5% on duty-paid value | $8,520 (paid by forwarder) | $21,300 (paid by you) |
| Broker fees, bond, admin | included in DDP | ~$3,000 |
| Forwarder DDP markup | ~$28,000 | n/a |
| Visible all-in cost (year 1) | ~$446,920 | ~$472,300 |
| Less: import GST claimed as ITC | $0 (you are not IOR) | ($21,300) |
| Net economic cost (year 1) | ~$446,920 | ~$451,000 |
| CBSA reassessment risk (years 1-4) | Real and uncapped | None |
On the headline number, DDP wins by about $25,000. On the net economic basis once you recover the import GST, the gap shrinks to about $4,000 in DDP’s favour. That $4,000 is the price you are paying to keep the deferred CBSA liability sitting on your business. The first time you receive a verification letter on a single year of those entries, the $4,000 saving is gone many times over.
How to transition off DDP onto your own clean import
If you have been running DDP and want to switch to running your own imports as the IOR, the operational sequence is straightforward, but it does take a few weeks of front-loaded setup.
- Get a Canadian Business Number (BN) with an import-export (RM) program account. Apply via Form RC1 with CRA. Plan for two to four weeks.
- Register on the CARM Client Portal. Link your RM account. Add an authorized user (your customs broker or your accountant).
- Post financial security with CBSA. Either a customs bond from a surety company or a cash deposit. Bond costs typically run $500 to $2,500 per year for low-to-mid volume importers.
- Non-resident sellers: file BSF900. Designates your Canadian record custodian under Memorandum D17-1-21. Without this your CBSA account stays inactive. We handle this through our CBSA Record Custody service. Detailed walkthrough in our BSF900 guide.
- Engage a Canadian-licensed customs broker. They file entries against your account, calculate duty and GST, and act as your CBSA interface. Typical fee is $75 to $150 per entry plus disbursements.
- Tell your supplier to switch shipping terms. Move from DDP to FCA (Free Carrier) or DAP (Delivered at Place). The supplier still handles export and origin-country logistics; you take over from the Canadian port onward.
- Engage a Canadian-side freight forwarder if needed. For sellers who want a single point of contact on the Canadian leg, a broker-forwarder combo works well.
- Register for GST/HST (if not already) so the import GST flows back to you as input tax credits. See our Non-Resident GST/HST guide.
- Reconcile the import GST on every entry. Each CARM statement of account shows the GST billed. That number goes into your GST/HST return as an input tax credit. Most sellers who do this in-house miss this step; we handle it monthly for our bookkeeping clients.
Allow four to eight weeks from start to first clean shipment. We do this end-to-end for non-resident clients as part of our Non-Resident GST/HST and CBSA Record Custody services.
What about the CBSA Voluntary Disclosures Program?
If you suspect your prior DDP shipments were under-declared and you want to clean it up before CBSA finds you, the CBSA has a voluntary disclosure mechanism similar to (but separate from) CRA’s VDP. Coming forward voluntarily can reduce or eliminate penalties on prior misdeclarations. Whether to use it depends on the materiality of the under-declaration and your overall exposure profile. Talk to a CPA or customs lawyer before filing anything; the disclosure paperwork commits you to the position taken.
Frequently asked questions
What is DDP shipping?
DDP (Delivered Duty Paid) is an Incoterms 2020 trade term where the seller or freight forwarder handles everything from export through Canadian customs clearance, duty payment, import GST payment, and delivery to your destination in Canada. You receive a single per-unit landed price and do not interact with CBSA directly.
Why are DDP quotes from China usually cheaper than running my own import?
Some of the gap is legitimate scale efficiency: forwarders share containers, post their own CBSA security in bulk, and get bulk broker rates. When the gap is more than 20% or so, most of the saving is usually built from under-declared commercial invoice values, aggressive HS classifications, country-of-origin manipulation, or de minimis abuse. CBSA can reassess any of those for up to four years after the entry.
If my forwarder under-declares, am I responsible?
CBSA pursues the importer of record (the forwarder) first. When the IOR is offshore and uncollectable, CBSA has authority to pursue the owner of the goods, which is you. Penalties, duty, GST, and interest can all be assessed years after the entry. The forwarder’s margin is not your shield.
Can I claim the import GST as an input tax credit if I import DDP?
No. Under DDP, the forwarder is the importer of record on the CBSA entry, and the import GST is billed to their CARM account. Input tax credits follow the importer of record. To recover the import GST as an ITC on your GST/HST return, you need to be the IOR on your own CARM account.
What is the difference between DDP and DAP?
DAP (Delivered at Place) is identical to DDP except that the buyer (you) handles Canadian customs clearance, duty, and import GST. The seller still handles export, freight, and delivery to the named place. DAP is the recommended replacement for DDP for most Amazon FBA sellers because it preserves the convenience of door-to-door delivery while putting you in control of the customs side.
How long does it take to set up to run my own imports?
Four to eight weeks for the full setup: BN with RM account, CARM portal registration, financial security posted, broker engaged, and (for non-residents) BSF900 approved. The first clean shipment can usually ship as soon as the bond is in place and the broker has filed your first entry against your account.
Does Amazon care which Incoterm I use?
No. Amazon does not act as the importer of record under any Incoterm and does not interact with CBSA on your behalf. The choice of Incoterm is entirely between you, your supplier, and your forwarder.
What if I have been on DDP for several years and want to clean it up?
Two paths. First, switch new shipments to FCA or DAP and run them through your own CARM account. Second, if you suspect material under-declaration on past shipments, talk to a CPA or customs lawyer about CBSA’s voluntary disclosure options before CBSA contacts you. Coming forward voluntarily can reduce penalties and interest. Filing the disclosure commits you to a position, so do not file without advice.
What to do next
If you are an Amazon FBA Canada seller on DDP and you are GST/HST registered (or about to register), the math almost always favours switching to your own clean import as the IOR. The headline per-unit price might be a bit higher, but the recovered import GST closes most of the gap and the absence of CBSA reassessment exposure closes the rest. If you have been on DDP for years and are not sure what was declared on your behalf, that is a separate cleanup conversation worth having with a CPA who handles non-resident imports.
We help non-resident Amazon FBA Canada sellers move off DDP, set up their own CARM account, file BSF900, register for GST/HST, and recover the import GST on every shipment going forward. Get in touch with a short note about your current setup (which Incoterm, which forwarder, monthly volume, whether you have a BN yet), and we will respond within one business day with a fixed-fee quote covering the transition and the ongoing compliance. Pricing on our pricing page, including the bundled rate for combined GST/HST and CBSA Record Custody clients.
Related reading from our blog:
- Customs Clearance for Amazon Canada Sellers: How It Works, Who Does What, and How to Recover the GST
- How to File the BSF900: A Step-by-Step Guide for Non-Resident Importers
- Amazon FBA Canada GST/HST for Non-Resident Sellers: When to Register and Why
- GST Input Tax Credits on Freight Forwarding for Amazon Sellers