diff --git a/compiler/src/dotty/tools/dotc/ast/Desugar.scala b/compiler/src/dotty/tools/dotc/ast/Desugar.scala
index 0c44a640ec25..0dc9c1946d67 100644
--- a/compiler/src/dotty/tools/dotc/ast/Desugar.scala
+++ b/compiler/src/dotty/tools/dotc/ast/Desugar.scala
@@ -920,8 +920,9 @@ object desugar {
     assert(arity <= Definitions.MaxTupleArity)
     def tupleTypeRef = defn.TupleType(arity)
     if (arity == 1) ts.head
+    else if (arity == 0)
+      if (ctx.mode is Mode.Type) TypeTree(defn.UnitType) else unitLiteral
     else if (ctx.mode is Mode.Type) AppliedTypeTree(ref(tupleTypeRef), ts)
-    else if (arity == 0) unitLiteral
     else Apply(ref(tupleTypeRef.classSymbol.companionModule.termRef), ts)
   }
 
diff --git a/tests/neg/i5640.scala b/tests/neg/i5640.scala
new file mode 100644
index 000000000000..c3a789f8c9bf
--- /dev/null
+++ b/tests/neg/i5640.scala
@@ -0,0 +1,3 @@
+object test {
+  val foo = (()) => () // error: not a legal formal parameter
+}
\ No newline at end of file