PARIS (Reuters) - Google will not have to pay 1.1 billion euros ($1.22 billion) in back taxes demanded by French authorities, an appeals court in France ruled on Thursday, dashing the government's bid to overturn a 2017 decision.

The latest ruling comes at a time France is trying to crack down on digital service giants and the tax they pay, with the planned introduction of a French levy and as it pushes for broader international reforms.

The back tax case centers on a claim by the French finance ministry that Google had declared advertising revenue in Ireland which had actually been earned in France, thus avoiding paying corporate tax and value-added tax between 2005 and 2010.

But the appeals court in Paris said it agreed with an earlier ruling that favored the U.S. company and argued that Google Ireland Limited did not have a "permanent establishment" or sufficient taxable presence in France to justify the bill.

(Reporting by Simon Carraud, Writing by Sarah White; Editing by Kirsten Donovan)