Paint the skin as per norm.
Paint the tattoo with whatever colors you fancy. I typically dilute so that they're not 100% opaque.
I then glaze over top with the same color as my skin highlights and shadows to knock back the colors of the tattoo and make it look like it's faded into the skin.
The approach is how I do most of my freehand as well, especially on materials where the pattern is supposed to be sewn into the fabric or more of a natural pattern (fur, markings, etc.) as opposed to a painted pattern on a surface (like tank markings, although glazing your shadow colors helps shade and unify it all together just the same).
Some examples:
In my most recent piece, almost all the freehand was flat colors. I used a diluted (almost water-color consistency) dark green mix for the texture pattern, and the flowers were a combination of White, Red, Yellow, Purples and Blues.
Once I had painted all the patterning, I glazed over with my highlights and shadow tones to shade everything with consistent colors, making it look like the patterns are sewn into and are a part of the fabric.
On this piece, the swirls were painted with flat S75 White Sands. I lightly glazed my tea highlight over the brightest parts and knocked back the recessed areas with the same tones as my shadows helped provide all the shading.