ZURICH (Reuters) - The Swiss federal tax administration (FTA) has decided not to appeal against a court decision to let UBS inspect files and receive information in a tax investigation by French tax authorities, FTA said on Monday.

The Swiss federal administrative court (FAC) in October decided to grant UBS "party status", allowing it to access the files and be served with all final decisions by Switzerland's tax administration following a request from French tax authorities to transmit clients' tax data in May.

"The Federal Tax Administration recognizes that UBS could be especially impacted by the mutual assistance procedure due to the ongoing proceedings," FTA said in a statement on Monday.

"It should therefore be granted party rights, and FTA will not appeal the decision with the Swiss Federal Supreme Court."

(Reporting by Brenna Hughes Neghaiwi)