(1) Section 34 of the Finance Act, 1973, is hereby amended in subsection (1) in the definition of "income from a qualifying patent" by the insertion after paragraph (a) of the following proviso:
"Provided that where the royalty or other sum exceeds the royalty or other sum which would have been paid if the payer of the royalty or other sum and the beneficial recipient thereof were independent persons acting at arm's length, the excess shall not be income from a qualifying patent,".
(2) Section 170 of the Corporation Tax Act, 1976, is hereby amended -
(a) in subsection (1) by the substitution for the definition of "disregarded income" of the following definition:
"‘disregarded income’ means -
(a) income from a qualifying patent which by virtue of subsection (2) of section 34 of the Finance Act, 1973 (income from patent royalties) has been disregarded for the purposes of income tax, and
(b) income from a qualifying patent which by virtue of subsection (2) of section 34 of the Fi