diff --git a/crates/compiler/fmt/src/def.rs b/crates/compiler/fmt/src/def.rs
index 3f62ac4179..3434990564 100644
--- a/crates/compiler/fmt/src/def.rs
+++ b/crates/compiler/fmt/src/def.rs
@@ -558,6 +558,7 @@ impl<'a> Formattable for TypeHeader<'a> {
             let need_parens = matches!(var.item, Pattern::Apply(..));
 
             if need_parens {
+                buf.indent(vars_indent);
                 buf.push_str("(");
             }
 
diff --git a/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.formatted.roc b/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.formatted.roc
new file mode 100644
index 0000000000..26fa962bed
--- /dev/null
+++ b/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.formatted.roc
@@ -0,0 +1,4 @@
+il3 \k -> # w#z
+    CCC @C # i
+        (t! K) : i
+    C
\ No newline at end of file
diff --git a/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.result-ast b/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.result-ast
new file mode 100644
index 0000000000..d8e89a5573
--- /dev/null
+++ b/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.result-ast
@@ -0,0 +1,86 @@
+@0-31 SpaceAfter(
+    Apply(
+        @0-3 Var {
+            module_name: "",
+            ident: "il3",
+        },
+        [
+            @3-31 Closure(
+                [
+                    @4-5 Identifier {
+                        ident: "k",
+                    },
+                ],
+                @13-31 SpaceBefore(
+                    Defs(
+                        Defs {
+                            tags: [
+                                EitherIndex(0),
+                            ],
+                            regions: [
+                                @13-28,
+                            ],
+                            space_before: [
+                                Slice<roc_parse::ast::CommentOrNewline> { start: 0, length: 0 },
+                            ],
+                            space_after: [
+                                Slice<roc_parse::ast::CommentOrNewline> { start: 0, length: 0 },
+                            ],
+                            spaces: [],
+                            type_defs: [
+                                Alias {
+                                    header: TypeHeader {
+                                        name: @13-16 "CCC",
+                                        vars: [
+                                            @16-18 OpaqueRef(
+                                                "@C",
+                                            ),
+                                            @22-25 SpaceBefore(
+                                                Apply(
+                                                    @22-24 Identifier {
+                                                        ident: "t!",
+                                                    },
+                                                    [
+                                                        @24-25 Tag(
+                                                            "K",
+                                                        ),
+                                                    ],
+                                                ),
+                                                [
+                                                    LineComment(
+                                                        "i",
+                                                    ),
+                                                ],
+                                            ),
+                                        ],
+                                    },
+                                    ann: @27-28 BoundVariable(
+                                        "i",
+                                    ),
+                                },
+                            ],
+                            value_defs: [],
+                        },
+                        @30-31 SpaceBefore(
+                            Tag(
+                                "C",
+                            ),
+                            [
+                                Newline,
+                            ],
+                        ),
+                    ),
+                    [
+                        LineComment(
+                            "w#z",
+                        ),
+                    ],
+                ),
+            ),
+        ],
+        Space,
+    ),
+    [
+        Newline,
+    ],
+)
diff --git a/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.roc b/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.roc
new file mode 100644
index 0000000000..7f7f5a10b3
--- /dev/null
+++ b/crates/compiler/test_syntax/tests/snapshots/pass/repr_7346.expr.roc
@@ -0,0 +1,4 @@
+il3\k->#w#z
+ CCC@C(#i
+t!K):i
+ C
diff --git a/crates/compiler/test_syntax/tests/test_snapshots.rs b/crates/compiler/test_syntax/tests/test_snapshots.rs
index cfed66a2aa..b722891bcd 100644
--- a/crates/compiler/test_syntax/tests/test_snapshots.rs
+++ b/crates/compiler/test_syntax/tests/test_snapshots.rs
@@ -596,6 +596,7 @@ mod test_snapshots {
         pass/record_updater_var_apply.expr,
         pass/record_with_if.expr,
         pass/record_with_lots_of_newlines.expr,
+        pass/repr_7346.expr,
         pass/requires_type.header,
         pass/return_apply_newline.expr,
         pass/return_field_access_in_parens.expr,