Handling "contraband" tattoos in closed-book exams
"Cover it up" seems the only realistic solution if it appears to be a tattoo.
However, since we're discussing this in the hypothetical, writing a theorem on your arm may serve as a nice reminder of a basis from which to work on problems, but it can't really answer something useful for you. Just as younger students tend to look at their fingers when counting, they still have to put in the work of translating an abstract numerical problem to their fingers, then "read" the information from their hand, and finally write their answer down. We don't restrict their fingers as counting tools. Advanced students make more elaborate associations between concepts they're learning and something concrete -- this is usually encouraged by instructors when we explain things in plain language or metaphors. So, your question makes me think about what questions I'm asking my students. If it's just "Write down this definition from memory", then maybe I'm not going deep enough in the topic. Suppose instead that I said something like "Here's a definition of a key term you can look up anywhere, or tattoo it on your arm if you really like it! Now, which of the following things matches this description?"
If it is a tattoo, then the proctor may ask that it is covered : plaster, bandage etc. If the student refuses then they may not be allowed to sit the exam.
However, it does depend on the institution and the institution’s regulations and any specific conditions for that exam...
If it is simply written then the student can wash their hands...
The purpose of learning is to have that knowledge and understanding with you your entire life. Assuming a tattoo is at least as permanent as your memories, wouldn't it stand to reason that it be allowed on the test? A closed-book test is intended to simulate a scenario where one cannot rely on outside sources of information to solve a problem. "You might not have your textbook with you in the field, so you shouldn't have to rely on it," but you will never be without your tattoo any more than you would be without the things you learned in class.