Google will not have to pay 1.1bn euros (£970m) in back taxes, after the technology giant won a legal case brought by the French authorities.
A court in Paris ruled that the internet search firm’s Irish subsidiary was not liable for tax in France.
Google employs 700 people in France, but advertising contracts sold for display in France are booked through its subsidiary in low-tax Ireland.
In 2015 the company paid just 6.7m euros in corporate taxes in France.
The court was advised that Google did not have a “permanent establishment” or sufficient taxable presence in France to justify the bill.
“Google Ireland Ltd isn’t taxable in France over the period 2005-2010” the court said in a statement.
European authorities have become increasingly tough on American technology giants including Google and its parent company Alphabet.
In June the EU fined Google a record 2.4bn euro for abusing its dominant position in the search engine business.
France’s newly elected administration, led by Emmanuel Macron, has also reiterated the intention to pursue international companies they perceive as not paying their fair share of tax.
Italian and British authorities have struck deals with Google to reclaim some of the tax they believe the search giant owed. But the figures agreed were much smaller, amounting to hundreds of millions of dollars rather than the $ 1.3bn claimed by France.