Incoterms 2026 Chart: the 11 Rules in Force (Incoterms 2020) Explained

No, there is no "Incoterms 2026" edition. The reference in force remains the Incoterms 2020 rules of the International Chamber of Commerce, applicable since 1 January 2020; a decennial revision is only expected around 2030, with no official date. Always state "Incoterms 2020" and the named place in each contract to secure the allocation of risks and costs.

The short answer: there is no Incoterms 2026 edition. The rules in force in 2026 are Incoterms® 2020, published by the International Chamber of Commerce and applicable since 1 January 2020. No new edition has been announced by the ICC: a revision is simply expected around 2030, the ICC having renewed its recent editions every ten years (2000, 2010, 2020). A contract signed in 2026 must therefore state "Incoterms 2020" explicitly.

Two points in this table cause most of the disputes we see. First, under CPT, CIP, CFR and CIF the seller pays the carriage but the risk has already passed long before the goods arrive: paying for transport and bearing the risk of it are two different things. Second, DPU is the only rule that obliges the seller to unload at destination, which is precisely why it replaced the former DAT in the 2020 edition.

• DAT became DPU, widening delivery from a terminal to any place, provided the seller unloads.
• CIP now requires all-risks insurance (Institute Cargo Clauses A) instead of the minimum cover; CIF kept the minimum cover (Clauses C).
• FCA gained an option allowing the parties to arrange an on-board bill of lading, which unblocks letter-of-credit financing.
• Delivery by the buyer's or seller's own means of transport is now expressly contemplated under FCA, DAP, DPU and DDP.

Incoterms (International Commercial Terms) are a set of 11 standardised rules published by the ICC since 1936. Their purpose is to clearly define the allocation of obligations between buyer and seller in an international sales contract.

They do not replace the sales contract: they say nothing about the transfer of ownership, the price, the payment terms, or the law governing the contract. Assuming an Incoterm settles those questions is the single most expensive misunderstanding in international trade.

What Incoterms determine#

Each Incoterm specifies three fundamental elements:

• The point of risk transfer: the exact point where responsibility for the goods passes from seller to buyer. If the goods are damaged after this point, the buyer bears the loss.
• Cost allocation: who pays for main carriage, insurance, customs fees, unloading, and other logistics costs.
• Documentary obligations: who is responsible for obtaining export and import documents, bills of lading, and required certificates.

What Incoterms do not govern#

It is crucial to understand the limits of these rules. Incoterms do not cover:

• the transfer of ownership of the goods (governed by the sales contract and applicable law);
• the consequences of contractual non-performance (delay, non-conformity, hidden defects);
• the applicable law in the event of a dispute;
• customs duties and taxes beyond their allocation between the parties;
• the quality of the goods or their technical specifications.

These elements must be specified in the sales contract itself, independently of the chosen Incoterm.

Incoterms 2020 are divided into two families based on the mode of transport.

Multimodal rules (any mode of transport)#

EXW (Ex Works): The seller makes the goods available at their premises. The buyer assumes all costs and risks from that point. This is the Incoterm that imposes the minimum obligations on the seller.

FCA (Free Carrier): The seller delivers the goods to the carrier nominated by the buyer, after export clearance. A major innovation of Incoterms 2020 allows the seller and buyer to agréé that the carrier will issue an "on board" bill of lading in the seller's name, facilitating letter of credit payments.

CPT (Carriage Paid To): The seller pays for main carriage to the agreed destination, but risk transfers upon delivery to the first carrier.

CIP (Carriage and Insurance Paid To): Same as CPT, with the additional obligation for the seller to obtain insurance. Incoterms 2020 strengthened this requirement: the seller must now cover the goods at Institute Cargo Clauses Level A ("all risks" coverage), up from the minimum Level C previously.

DAP (Delivered at Place): The seller bears all costs and risks until the goods are made available at the agreed place, ready for unloading. Import clearance is the buyer's responsibility.

DPU (Delivered at Place Unloaded): Formerly DAT (Delivered at Terminal) in Incoterms 2010, renamed in 2020 to extend the scope beyond terminals alone. This is the only Incoterm where the seller is responsible for unloading the goods.

DDP (Delivered Duty Paid): The seller assumes all obligations, including import clearance and payment of customs duties. This is the Incoterm that imposes the maximum obligations on the seller.

Maritime and inland waterway rules only#

FAS (Free Alongside Ship): The seller places the goods alongside the vessel at the port of shipment. Risk transfers at that precise moment.

FOB (Free on Board): The seller loads the goods on board the vessel nominated by the buyer. Risk transfers when the goods are on board.

CFR (Cost and Freight): The seller pays maritime freight to the port of destination, but risk transfers upon loading at the port of shipment.

CIF (Cost, Insurance and Freight): Same as CFR, with an additional insurance obligation for the seller. Unlike CIP, the required coverage level remains Clause C (minimum coverage), as CIF is traditionally used for bulk commodities.

The table below summarises, for each of the 11 rules, the mode of transport, the point of risk transfer, the minimum insurance required from the seller, and which party clears the goods at import.

Only CIP and CIF require insurance from the seller, at different levels; DPU is the only rule where the seller unloads at destination, and DDP the only one where the seller handles import clearance and duties.

Choosing an Incoterm should never be dictated by habit. It results from an analysis of three factors.

Mode of transport#

If your shipment combines multiple modes (truck + ship + truck), maritime Incoterms (FAS, FOB, CFR, CIF) are unsuitable. In this case, prefer FCA over FOB, or CPT/CIP over CFR/CIF. The ICC itself recommends FCA for containerised transport, as the risk transfer point of FOB (on board the vessel) does not match the logistics reality of a container terminal handover.

Supply chain control#

If you are a seller and wish to retain control over transport to destination, the C family (CPT, CIP, CFR, CIF) or D family (DAP, DPU, DDP) Incoterms are appropriate. If you prefer the buyer to organise transport, opt for EXW or FCA.

Capacity to handle customs formalities#

DDP requires the seller to be able to complete import customs formalities in the destination country. For a French SME exporting to a third country, this can be complex and costly. In such cases, DAP is often more realistic: the seller transports to destination, but the buyer handles import.

Hayot Expertise advice: the right Incoterm is not chosen by habit. It is chosen based on the actual flow, mode of transport, and each party's capacity to handle formalities. A poor Incoterm choice creates avoidable extra costs and delays, often discovered once the goods are already in transit, when it is too late to renegotiate.

Choosing an Incoterm has more than logistical consequences: it also drives your VAT treatment and your customs formalities. This is the most often overlooked extension, and where an accounting firm secures the operation.

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Export outside the EU: who is the exporter?#

The VAT exemption on exports rests on Article 262-I of the CGI and on proof that the goods have left the Union. Beware of the so-called 'indirect' export: under EXW, FCA, FAS or FOB, the buyer arranges transport, but the French seller remains the exporter for VAT purposes and must appear as such on the customs declaration. Without proof that the goods have left the territory, the exemption can be challenged.

Intra-EU sale: the intra-Community supply#

For a sale to another Member State, the exemption for the intra-Community supply (Article 262 ter-I of the CGI) requires the buyer to be VAT-registered in their country and to have provided their number, the goods to physically leave France (proof of transport), and you to file the VAT recapitulative statement. The chosen Incoterm determines who arranges transport, and therefore who holds the proof of dispatch: decisive in the event of an audit.

DDP at import: EORI and reverse charge#

DDP makes the seller liable for import VAT in the destination country. For France, the seller needs an EORI number and, since 1 January 2022, import VAT is compulsorily reverse-charged on the CA3 return (fields pre-filled by the DGFiP), with no cash-flow advance. Watch-out: a seller established outside the EU and not registered can neither pay nor deduct the local VAT, with a risk of definitive VAT cost; a tax representative then becomes necessary.

Your reporting formalities#

For any customs clearance, import or export, the EORI number is mandatory: without a valid EORI, no customs declaration can be filed. It is free, requested via SOPRANO EORI on douane.gouv.fr, with registration at the head-office SIREN level (see our EORI number guide). For intra-EU trade in goods, the DEB has been abolished since January 2022, replaced by the monthly EMEBI statistical survey and the VAT recapitulative statement; the DES remains due for intra-EU services. :::

In a context of trade tensions and customs duty volatility, the ICC published in April 2025 a guidance note titled "Using the Incoterms 2020 Rules to Manage Tariff Risk in International Trade". This free document, downloadable from the ICC website, provides essential guidance for companies facing unpredictable changes in customs tariffs.

Key takeaways from the ICC note#

The note emphasises that Incoterms do not directly address tariff risk: that is, the risk that a customs duty is modified between contract signature and delivery. However, the choice of Incoterm directly influences who bears this risk:

• Under DDP, the seller bears import duties. If these duties increase between signature and delivery, the seller absorbs the increase, unless the contract provides otherwise.
• Under DAP or EXW, the buyer bears the tariff risk, as they are responsible for import clearance.
• Under FCA, tariff risk is shared: the seller handles export, the buyer handles import and associated duties.

Practical recommendations#

The ICC recommends that companies accompany their chosen Incoterm with specific contractual clauses explicitly addressing tariff risk: price revision clauses in the event of customs duty changes, hardship clauses, or cost-sharing mechanisms. These clauses are particularly relevant in the current geopolitical context, marked by a proliferation of protectionist measures.

Confusing risk transfer with ownership transfer#

This is the most common error. The Incoterm determines when the risk of loss or damage is transferred, but not when ownership of the goods changes hands. Transfer of ownership is governed by the sales contract and applicable national law. Goods can be at the buyer's risk while remaining the seller's property until full payment.

Using a maritime Incoterm for containerised transport#

The ICC formally advises against using FOB, CFR, or CIF for containerised goods. In a container terminal, the goods are handed to the carrier well before being loaded on board the vessel. If a loss occurs between terminal handover and loading, the FOB seller remains responsible despite no longer having physical control of the goods. FCA is the recommended alternative.

Failing to specify the Incoterms version#

Stating "CIF Marseille" in a contract is insufficient. The correct wording is: "CIF Marseille Incoterms 2020". Without this precision, in the event of a dispute, a court could apply an earlier version (Incoterms 2010 or even 2000), which would alter the allocation of obligations, particularly regarding insurance (CIP/CIF) or the point of risk transfer.

Neglecting the precision of the location#

Each Incoterm must be followed by a precise location. "DAP Paris" is too vague. You should indicate "DAP Warehouse X, 12 Rue Y, 75001 Paris, France". The more precise the location, the less room for interpretation in the event of a dispute.

Representative case study (illustrative): the mispriced DDP trap. A French SME sells DDP to a third country to 'make life easier' for its client. It later discovers that, under DDP, the seller bears import clearance and customs duties, must register for VAT in the destination country (or even appoint a tax representative there), and may pay a non-recoverable local VAT: the commercial gesture turns into a definitive cost. In such files, DAP, where the buyer handles import, would often have been more prudent. The seller delivers to destination without taking on a foreign tax regime it does not control.

The formulation of the Incoterm clause in the sales contract must be rigorous. Here are the essential elements:

1. The three-letter Incoterm (EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR, CIF);
2. The specified place or port (full address or identified terminal);
3. The reference "Incoterms 2020" to identify the applicable version;
4. The competent jurisdiction in the event of a dispute;
5. The applicable law governing the contract (which is distinct from the Incoterms).

Example of a correct clause: "Sale CIP Entrepôt Logisport, 45 rue de la Logistique, 69007 Lyon, France, Incoterms 2020. Applicable law: French law. Competent jurisdiction: Commercial Court of Lyon."

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